Minneapolis tourist taxes stack higher than most visitors expect: plan on roughly 15% in taxes on a hotel room at a large property (closer to 17% once the Tourism Improvement District fee is added), 9.025% sales tax on most retail purchases, a 3% entertainment tax on tickets and short-term lodging, an extra 3% restaurant tax and 3% liquor tax if you eat or drink in the downtown district, and combined car rental taxes that can top 22%.
What You’ll Pay on a Hotel Room
Lodging is where the layers hit hardest. At a Minneapolis hotel with more than 50 rooms, your room rate carries the state’s 6.875% general sales tax, Hennepin County’s 0.15% sales tax and 0.5% transit tax, the Minneapolis 0.5% city sales tax, the Metro Area 0.25% housing tax and 0.75% transportation tax, a 3% Minneapolis entertainment tax, and a 3% Minneapolis lodging tax that applies only to properties with more than 50 rooms.1Minnesota Department of Revenue. Minneapolis Special Local Taxes2Minnesota Department of Revenue. Taxes and Rates
The combined city rate on lodging is capped at 6.5%, covering the 0.5% city sales tax, the 3% entertainment tax, and the 3% lodging tax. Total it up with the state, county, and metro pieces and a guest at a large hotel pays roughly 15% on the room. At a smaller property with 50 or fewer rooms, the 3% lodging tax falls off and the total drops to about 12%.
Hotels with 50 or more rooms also collect a 2% Tourism Improvement District fee on room revenue, shown as a separate line at checkout.3Meet Minneapolis. Minneapolis Tourism Improvement District The TID is not a government tax; it’s a self-assessed charge managed by a governance committee of Minneapolis hotel leaders, with revenue directed to destination marketing. It still adds to what you pay, pushing the effective rate at large hotels to roughly 17% of the room charge.
Eating and Drinking Downtown
Two extra taxes apply inside the Downtown Taxing District that don’t apply elsewhere in the city. A 3% restaurant tax hits food and beverages sold by restaurants, caterers, and similar establishments. A separate 3% downtown liquor tax applies to alcohol sold for on-premises consumption at bars and restaurants within the same boundaries.1Minnesota Department of Revenue. Minneapolis Special Local Taxes An additional 0.25% within the district goes to youth recreational facilities and programs through the Minneapolis Park and Recreation Board.
The district boundary generally follows the railroad tracks northwest of Target Field on its north side. Most of the North Loop currently sits outside the district, so those extra charges don’t apply there. A dinner with cocktails inside the district can carry more than 12% in combined state and local taxes on the food, and more on the drinks. The receipt will show the breakdown line by line.
Event Tickets and the Entertainment Tax
The city’s 3% entertainment tax reaches further than most visitors realize. It applies to admission at sporting events, concerts, and theater; to amusement devices and games like jukeboxes, video games, pool tables, and carnival rides; and to food, drinks, and merchandise you buy during a live performance, even at a bar with no cover charge.4City of Minneapolis. Minneapolis Special Local Taxes It also applies to short-term lodging citywide, which is why it appears on hotel bills.
Tickets to events at Target Center carry an additional 10% admission tax under Minnesota Statutes Section 473.595, plus a surcharge of at least $1 per ticket. That’s separate from the 3% entertainment tax and applies specifically to basketball and hockey arena events. On a mid-range Timberwolves or Lynx ticket, the admission tax alone can add $10 or more before the entertainment tax kicks in.
Sales Tax on Shopping
Retail purchases in Minneapolis carry a combined 9.025% sales tax: 6.875% state, 0.15% Hennepin County, 0.5% Hennepin County transit, 0.5% city, 0.25% Metro Area housing, and 0.75% Metro Area transportation.2Minnesota Department of Revenue. Taxes and Rates1Minnesota Department of Revenue. Minneapolis Special Local Taxes
Minnesota exempts most clothing from state sales tax, which is a real perk if you’re shopping while in town. Groceries and prescription drugs are also exempt. Prepared food, electronics, souvenirs, and most other retail goods get the full 9.025%. Shop outside city limits, such as at the Mall of America in Bloomington, and the Minneapolis 0.5% city portion doesn’t apply, though Bloomington has its own local rate.
Car Rentals
Renting a car in Minnesota comes with one of the country’s steepest tax loads. The state charges a 9.2% motor vehicle rental tax on top of the 6.875% general sales tax, and an additional 5% motor vehicle rental fee may apply depending on the rental arrangement. Once local sales taxes are added, the total on a Minneapolis car rental can exceed 22%. For a short visit, rideshare and transit often come out cheaper.
Airbnb and Other Short-Term Rentals
Booking through Airbnb doesn’t get you around Minneapolis lodging taxes. Short-term rentals are subject to the same state and local sales taxes as hotels, and the 3% entertainment tax applies to all short-term lodging in the city.4City of Minneapolis. Minneapolis Special Local Taxes The 3% lodging tax applies only to properties with more than 50 rooms, so most individual Airbnb listings escape that particular layer.
Major platforms typically collect and remit state and local sales taxes on behalf of hosts. Before booking, confirm the total includes city-level taxes; some listings show them only at checkout, and the entertainment tax is easy to miss until you see the final price.
When You Can Skip Some of These Taxes
Local lodging taxes apply only to stays of 30 days or less.5Minnesota House of Representatives. Local Lodging Taxes in Minnesota Stay at the same property for more than 30 consecutive days and the stay is treated as residential; the lodging and entertainment tax layers drop off, though general sales tax on the room still applies. This matters mostly for extended corporate travel or project stays.
Federal government employees on official travel can claim exemption from Minnesota sales tax with proper documentation, such as a government purchase order or a completed Form ST3 certificate of exemption.6Minnesota Department of Revenue. Form ST3 Certificate of Exemption Qualifying nonprofit and charitable organizations can also claim exemption with a valid certificate. In every case, you have to present the paperwork to the hotel or vendor at the time of purchase. Claiming an exemption after checkout is far harder and generally requires filing directly with the Minnesota Department of Revenue.