The sales tax rate in Washington County, Minnesota is 8.375% in most of the county, and 8.875% in Oakdale, Stillwater, Woodbury, and Newport. That combined rate is built from the 6.875% Minnesota state tax, two metro-area taxes that apply across all seven Twin Cities counties, and a half-percent county tax. Four cities layer on an additional local tax that pushes the total half a point higher.
How the 8.375% Baseline Is Built
Minnesota’s state sales tax is 6.5%, plus a constitutionally required 0.375% that runs through July 1, 2034. Together they produce the 6.875% state rate.1Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.62 – Sales Tax Imposed; Rates
Every purchase in Washington County also carries two metro-area taxes that apply across the seven-county Twin Cities region: a 0.75% transportation sales tax and a 0.25% housing sales tax. These fund regional transit and affordable housing.2Minnesota Department of Revenue. Local Sales and Use Tax Rate Guide Q2 2026
Washington County adds its own 0.50% local option sales tax authorized under Minn. Stat. 297A.993. Half of that revenue funds road and bridge projects; the other half funds transit development and operations. The county also collects a $20 excise tax on vehicle purchases.3Washington County, MN. Local Option Sales Tax
Add it up: 6.875 + 0.75 + 0.25 + 0.50 = 8.375%. That’s what you pay on taxable purchases in Cottage Grove, Hugo, Forest Lake, Lake Elmo, Scandia, Afton, Bayport, and most unincorporated townships.2Minnesota Department of Revenue. Local Sales and Use Tax Rate Guide Q2 2026
Cities That Charge 8.875%
Four cities impose an additional local sales tax that raises the total combined rate to 8.875% as of mid-2026:
- Oakdale (the extra 0.50% is a county transit rate)
- Stillwater
- Woodbury
- Newport
City-level rates shift when local levies are adopted or sunset, so sellers setting up point-of-sale systems should pull the Department of Revenue’s quarterly rate guide rather than relying on memory.2Minnesota Department of Revenue. Local Sales and Use Tax Rate Guide Q2 2026
What’s Exempt and What’s Not
Minnesota exempts several everyday categories from sales tax altogether: clothing for general use, most unprepared grocery food, and prescription drugs.4Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.67 – General Exemptions
The grocery exemption has edges. Prepared food, candy, soft drinks, and dietary supplements are taxable. A bag of rice from the shelf is exempt; a sandwich from the deli counter is not.
The clothing exemption also has limits. Everyday wear (shirts, jeans, coats, shoes) is exempt. Sport and recreational equipment, protective gear, and accessories like jewelry and handbags are taxed at the full local rate.4Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.67 – General Exemptions
Most tangible goods, including appliances, electronics, furniture, and auto parts, are fully taxable. Digital products get the same treatment as physical goods under Minnesota law, so software downloads, streaming subscriptions, e-books, and online games are taxed.5Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.61 – Definitions
Services
Minnesota taxes a specific list of services rather than services broadly. The taxable list includes laundry and dry cleaning, pet grooming and boarding, building cleaning, parking, car washing and towing, landscape maintenance, security and alarm services, telecommunications, health clubs and tanning, admissions to entertainment and sporting events, and lodging. Professional services like legal, accounting, and consulting work are not on the list and are not taxed.6Minnesota Department of Revenue. Taxable Services in Minnesota
Vehicles
Motor vehicles work differently. Vehicle sales are taxed at the 6.875% state rate only; local sales taxes do not apply. Washington County’s $20 vehicle excise tax is collected when you transfer the title at the registrar’s office.7Minnesota Department of Revenue. Motor Vehicle Sales Buying a car in Woodbury does not carry the 8.875% retail rate.
Use Tax on Online and Out-of-State Purchases
When you buy a taxable item and the seller doesn’t collect Minnesota sales tax, you owe use tax at the same combined rate for your location. This comes up with online purchases from smaller out-of-state retailers and with items brought back from trips to lower-tax states. The use tax exists so there’s no advantage to shopping out of state purely to avoid the tax.8Minnesota Department of Revenue. Sales and Use Tax
Individuals file use tax electronically through the Department of Revenue’s online portal or on a paper form. Technically, every untaxed purchase of taxable goods used in Minnesota triggers the obligation.9Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.63 – Use Taxes Imposed; Rates
Most large online retailers already collect Minnesota sales tax. Since the 2018 Wayfair decision, remote sellers must register and collect once they exceed $100,000 in Minnesota sales or 200 Minnesota transactions over the prior 12 months. Marketplace providers like Amazon, Etsy, and eBay collect on behalf of their third-party sellers when they meet the same thresholds.10Minnesota Department of Revenue. Sales Tax for Remote Sellers11Minnesota Department of Revenue. Sales Tax for Marketplace Providers
If You’re Selling in Washington County
Before collecting sales tax, a business needs a Minnesota Tax ID. You can apply through the Department of Revenue’s Business Tax Registration portal or by phone at 651-282-5225 (toll-free 1-800-657-3605). The application asks for your federal EIN (sole proprietors without employees can use an SSN), legal and assumed business names, a six-digit NAICS code, the owner’s SSN, your physical business address, and your start date.12Minnesota Department of Revenue. Registering Your Business13Minnesota Department of Employment and Economic Development. Tax Identification Numbers
The physical address matters because it determines whether you collect at 8.375% or 8.875%. Setting the wrong rate means fixing it with the Department of Revenue later.
Filing Frequency
Returns are filed through the Department’s e-Services portal. How often depends on your tax liability:
- Less than $100 per month: file annually (due February 5 of the following year)
- $100 to $500 per month: file quarterly (due the 20th of the month after each quarter)
- More than $500 per month: file monthly (due the 20th of the following month)
Payment is typically made by electronic bank transfer when the return is submitted.14Minnesota Department of Revenue. Filing Returns and Recordkeeping
Late Penalties
Missing a payment deadline triggers a 5% penalty on the unpaid amount for the first 30 days, with another 5% added for each additional 30-day period or fraction of one, capped at 15% total. Failing to file the return at all adds a separate 5% penalty on top of that. If the Department sends written notice about repeated late filings, subsequent failures jump to a 25% penalty on the unpaid tax. Interest accrues on both the tax and the penalties until everything is paid.15Minnesota Office of the Revisor of Statutes. Minnesota Code 289A.60 – Civil Penalties
Sales tax is treated more aggressively than many other tax obligations because the money was collected from customers and held in trust by the business. Keep sales records, exemption certificates, and filed returns for at least six years to be safe during any audit.