The sales tax rate in Prior Lake, Minnesota is 7.375 percent. That combines the 6.875 percent Minnesota state rate with a 0.5 percent Scott County transportation tax. The city of Prior Lake does not add its own local sales tax, so the county levy is the only local piece on top of the state rate.
How the Rate Is Built
The state portion has two layers. Minnesota’s base sales tax is 6.5 percent on most retail sales. A constitutionally mandated 0.375 percent surcharge, dedicated to outdoor recreation, clean water, and arts programs, sits on top and is scheduled to expire July 1, 2034.1Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.62 – Sales Tax Imposed; Rates Together those two produce the 6.875 percent state rate.
Scott County added its 0.5 percent transportation tax in May 2015 under authority granted by Minnesota Statutes Section 297A.993. By law, that revenue can only pay for highway capital costs and transit capital and operating costs.2Scott County, MN. Transportation Sales Tax
What’s Taxable
The default rule in Minnesota is simple: physical goods are taxable unless a specific exemption applies. A sale for tax purposes covers any transfer of title or possession for money, barter, or exchange, which reaches leases, rentals, and items fabricated from materials a customer supplies.3Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.61 – Definitions
Services work the opposite way. Minnesota taxes a specific list rather than services generally. The taxable categories include admissions to entertainment, recreational, and athletic venues; lodging; parking; laundry and dry cleaning; building cleaning; pet grooming, boarding, and care; lawn and tree care; motor vehicle washing and towing; detective and security services; and massage, except when medically necessary.4Minnesota House of Representatives. The Minnesota Sales Tax Base
Digital content is taxable too. That covers downloaded or streamed music, audiobooks, movies, e-books, online games, and the digital codes that unlock them. Prewritten computer software is always treated as tangible personal property regardless of whether it comes on a disc or by download. Periodicals, newspapers, blogs, and news products are not taxed as digital products.5Minnesota Department of Revenue. Digital Products
Food is split. Groceries for home consumption are exempt, but prepared food is taxable, along with candy, soft drinks, dietary supplements, and food from vending machines.6Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.67 – General Exemptions If the retailer heated, mixed, or combined ingredients into a ready-to-eat item, you’ll pay the 7.375 percent rate on it.
What’s Exempt
Most clothing is exempt. The exemption covers “all human wearing apparel suitable for general use,” so everyday clothes, shoes, coats, and hats are tax-free. The carve-outs are narrower than many shoppers expect: belt buckles and costume masks sold separately, sewing supplies and materials, and clothing accessories like handbags, jewelry, wallets, watches, nonprescription sunglasses, umbrellas, and wigs all remain taxable.6Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.67 – General Exemptions
Food and food ingredients sold for home consumption are exempt, defined broadly in statute as substances sold for ingestion or chewing by humans and consumed for taste or nutritional value.6Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.67 – General Exemptions
Prescription and over-the-counter drugs are both exempt. An over-the-counter drug qualifies if its label includes a drug facts panel or lists active ingredients under federal labeling rules. Grooming and hygiene products such as soap, shampoo, toothpaste, and sunscreen do not qualify even if they carry that panel.6Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.67 – General Exemptions Medical devices, prosthetic devices, and hearing aids are exempt as well. Durable medical equipment like an oxygen concentrator is exempt when sold for home use and covered by Medicare or Medicaid. A doctor’s prescription alone does not make a normally taxable item exempt. An exercise bike prescribed for rehabilitation is still taxable because exercise bikes are not on the exempt list.7Minnesota Department of Revenue. Durable Medical Equipment
Cars Are Taxed Differently
Vehicle purchases don’t follow the standard 7.375 percent rate. The state motor vehicle sales tax is 6.875 percent of the purchase price.8Minnesota Department of Revenue. Motor Vehicle Sales Local sales taxes do not apply to vehicles. In their place, Scott County charges a flat $20 transportation excise tax on each motor vehicle purchased for road use, collected by the dealer at the time of sale.2Scott County, MN. Transportation Sales Tax So on a car bought in Prior Lake, the total is 6.875 percent plus a $20 flat fee, not 7.375 percent.
Online Orders Shipped to Prior Lake
Minnesota is a destination-based state, meaning the tax rate on a shipped purchase is based on where the buyer receives the item, not where the seller is located.9Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.668 – Sourcing of Sales An online order shipped to a Prior Lake address should be charged the full 7.375 percent rate.
Large marketplaces handle this for their third-party sellers. Minnesota requires marketplace facilitators like Amazon, eBay, and Etsy to collect and remit state and local sales tax if their total sales into the state exceed 200 transactions or $100,000 over the prior twelve months.10Minnesota Department of Revenue. Sales Tax for Marketplace Providers Every major platform clears those thresholds and applies the Prior Lake rate at checkout.
When the Seller Doesn’t Charge Tax
If you buy from a seller that doesn’t collect the right tax, through a private sale, an out-of-state retailer, or a smaller online shop, you owe use tax on the purchase. Use tax runs at the same rate as sales tax, 7.375 percent in Prior Lake, and is imposed under Minnesota Statutes Section 297A.63.11Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.63 – Use Taxes Imposed; Rates
Individuals get a small-purchase threshold. If your untaxed purchases for the year total less than $770, you don’t need to file or pay.12Minnesota House of Representatives. Minnesota Sales and Use Tax Above that, you file Form UT1 by April 15 of the following year through the Minnesota Department of Revenue.13Minnesota Department of Revenue. Minnesota Individual Income Tax Return M1 Instructions Unpaid use tax accrues interest and late-payment penalties.