Minnesota lesson 5 of 6
Minnesota state taxes, licences and permits
A standard Minnesota LLC does not pay a separate state entity-level tax, but members who are Minnesota residents pay personal income tax on their share of profits, and many businesses still need to register separately for sales tax or a trade licence.
Income tax for members
An LLC taxed as a partnership or sole proprietorship passes income through to its members, who report it on their personal Minnesota returns. Minnesota's graduated personal income tax reaches one of the higher top marginal rates in the country, so high-earning resident members should plan for that when budgeting distributions.
Sales and use tax and other registrations
If you make taxable sales or provide taxable services in Minnesota, register for a sales and use tax account with the Department of Revenue before you start selling. If you hire employees, you will also register for withholding tax and unemployment insurance.
Licences and permits
Minnesota has no single statewide general business licence covering every LLC. Requirements depend on your industry and the city or county where you operate, so check with your local licensing authority and any relevant state licensing board.
Key takeaways
- There is no separate Minnesota LLC entity-level income tax for a standard pass-through LLC.
- Register for sales and use tax with the Department of Revenue before making taxable sales.
- Licensing depends on industry and locality, not a single statewide rule.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team