Business Overview
Minnesota has a diverse economy with strengths in healthcare, manufacturing, financial services, and agriculture. The state offers a highly educated workforce, strong innovation culture, and quality of life factors. Its business ecosystem supports growth in medical devices, food production, and technology.
Key Facts & Figures
| Category | Details |
| Capital | St. Paul |
| Major Cities | Minneapolis, St. Paul, Rochester, Duluth, Bloomington |
| State Sales Tax Rate | 6.88% |
| Local Sales Tax Rate | Up to 2% additional local taxes |
| Corporate Income Tax | 6% flat rate |
| Physical Nexus Threshold | Physical presence through employees, property, or representatives |
| Economic Nexus Threshold | $100,000 in annual sales or 200 transactions |
Did you know?
Minnesota is home to 17 Fortune 500 companies, including Target, Best Buy, and 3M, showcasing its diverse business ecosystem.
Setup & Compliance
Minnesota provides comprehensive business registration with specific compliance requirements.
Setting Up a Minnesota Business:
- Select Your Business Structure: Consider Minnesota’s tax environment for different entity types.
- Register Your Business: File formation documents with the Minnesota Secretary of State.
- Register for Tax Accounts: Register with the Department of Revenue for sales tax and withholding.
- Obtain Required Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Employment and Economic Development if hiring employees.
Key Compliance Requirements:
- Annual Renewals: Minnesota entities must file annual renewals with the Secretary of State by December 31.
- Sales Tax Collection: Collect and remit 6.875% state sales tax plus applicable local taxes.
- Corporate Income Tax: C-corporations pay 9.8% corporate income tax.
- Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
- Professional Licensing: Many professions require specialized licenses through state boards.
Hiring & Payroll
Minnesota provides strong worker protections with several state-specific regulations.
Minnesota Payroll Requirements:
- Unemployment Insurance: Rates from 0.1% to 8.9% on first $38,000 of wages.
- State Income Tax Withholding: Required based on W-4MN form with progressive rates.
- Workers’ Compensation: Required for all employers.
Minnesota Employment Laws:
- Minimum Wage: $10.59 per hour for large employers; $8.63 for small employers (adjusted annually for inflation).
- Wage Theft Prevention: Detailed pay notices required at hire and when changes occur.
- Sick and Safe Leave: Minneapolis, St. Paul, and Duluth have local ordinances mandating paid leave.
- Final Paychecks: Due within 24 hours for employees who are fired; by next payday for those who quit.
- Minnesota is not a right-to-work state.
State Incentives
Minnesota offers strategic economic incentives to attract and retain innovative businesses.
Key Business Incentives:
- Minnesota Job Creation Fund: Grants for job-creating businesses.
- Research and Development Tax Credit: Supports innovative company development.
- Angel Investment Tax Credit: Encourages investment in early-stage businesses.
Small Business & Startup Support:
- Minnesota Small Business Development Center: Comprehensive business consulting.
- Border-to-Border Broadband Development Grant Program.
- Emerging Entrepreneur Loan Program: Support for minority and underserved entrepreneurs.
Regulatory Considerations
Minnesota provides a detailed regulatory environment with emphasis on innovation and worker protection.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting business and consumer information.
- Environmental Compliance: Stringent regulations supporting sustainable practices.
- Professional Licensing: Mandatory for various professional services.
Additional Regulatory Areas:
- Technology and Medical Device Industry Compliance.
- Agricultural Innovation Regulations.
Business Overview
Minnesota has a diverse economy with strengths in healthcare, manufacturing, financial services, and agriculture. The state offers a highly educated workforce, strong innovation culture, and quality of life factors. Its business ecosystem supports growth in medical devices, food production, and technology.
Key Facts & Figures
| Category | Details |
| Capital | St. Paul |
| Major Cities | Minneapolis, St. Paul, Rochester, Duluth, Bloomington |
| State Sales Tax Rate | 6.88% |
| Local Sales Tax Rate | Up to 2% additional local taxes |
| Corporate Income Tax | 6% flat rate |
| Physical Nexus Threshold | Physical presence through employees, property, or representatives |
| Economic Nexus Threshold | $100,000 in annual sales or 200 transactions |
Did you know?
Minnesota is home to 17 Fortune 500 companies, including Target, Best Buy, and 3M, showcasing its diverse business ecosystem.
Setup & Compliance
Minnesota provides comprehensive business registration with specific compliance requirements.
Setting Up a Minnesota Business:
- Select Your Business Structure: Consider Minnesota’s tax environment for different entity types.
- Register Your Business: File formation documents with the Minnesota Secretary of State.
- Register for Tax Accounts: Register with the Department of Revenue for sales tax and withholding.
- Obtain Required Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Employment and Economic Development if hiring employees.
Key Compliance Requirements:
- Annual Renewals: Minnesota entities must file annual renewals with the Secretary of State by December 31.
- Sales Tax Collection: Collect and remit 6.875% state sales tax plus applicable local taxes.
- Corporate Income Tax: C-corporations pay 9.8% corporate income tax.
- Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
- Professional Licensing: Many professions require specialized licenses through state boards.
Hiring & Payroll
Minnesota provides strong worker protections with several state-specific regulations.
Minnesota Payroll Requirements:
- Unemployment Insurance: Rates from 0.1% to 8.9% on first $38,000 of wages.
- State Income Tax Withholding: Required based on W-4MN form with progressive rates.
- Workers’ Compensation: Required for all employers.
Minnesota Employment Laws:
- Minimum Wage: $10.59 per hour for large employers; $8.63 for small employers (adjusted annually for inflation).
- Wage Theft Prevention: Detailed pay notices required at hire and when changes occur.
- Sick and Safe Leave: Minneapolis, St. Paul, and Duluth have local ordinances mandating paid leave.
- Final Paychecks: Due within 24 hours for employees who are fired; by next payday for those who quit.
- Minnesota is not a right-to-work state.
State Incentives
Minnesota offers strategic economic incentives to attract and retain innovative businesses.
Key Business Incentives:
- Minnesota Job Creation Fund: Grants for job-creating businesses.
- Research and Development Tax Credit: Supports innovative company development.
- Angel Investment Tax Credit: Encourages investment in early-stage businesses.
Small Business & Startup Support:
- Minnesota Small Business Development Center: Comprehensive business consulting.
- Border-to-Border Broadband Development Grant Program.
- Emerging Entrepreneur Loan Program: Support for minority and underserved entrepreneurs.
Regulatory Considerations
Minnesota provides a detailed regulatory environment with emphasis on innovation and worker protection.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting business and consumer information.
- Environmental Compliance: Stringent regulations supporting sustainable practices.
- Professional Licensing: Mandatory for various professional services.
Additional Regulatory Areas:
- Technology and Medical Device Industry Compliance.
- Agricultural Innovation Regulations.
