Get your tax IDs in Minnesota

An EIN, if you need one, takes minutes online. Minnesota then adds a tax ID for the taxes that actually apply, unemployment tax once you pay covered wages, Paid Leave on its own premium, and a new-hire report once you hire. Do not open an account just to have the number.

What’s different in Minnesota

• Income tax is four rates, not one flat rate. For 2026 they are 5.35%, 6.80%, 7.85%, and 9.85%, with the bracket set by filing status and taxable income⁵.
• A C corporation pays 9.8%¹⁹, and a minimum fee can sit on top. The 2026 fee is $260 from $1,280,000 and rises in steps to $12,830. The fee does not apply to a single-member LLC that reports only on the member's Form M1⁷.
• Sales tax is 6.875%² plus whatever local tax the address adds. There is no single combined rate for the state.
• Unemployment tax has no one new-employer rate. The new-employer rate is assigned from the average for your industry, not one rate for every new employer. For 2026 the wage base is $44,000, and a separate additional assessment is 14%¹² of the UI tax.
• Paid Leave is its own premium, on the same quarterly calendar. The statute prints a starting rate of 0.7%¹⁶ and lets the commissioner change it. The rate DEED now assigns is 0.88%¹⁷.

Do this

1. Get an EIN from the IRS if you need one. It is free and, if approved, issued immediately¹⁸ online. You will need it to hire, to open many bank accounts, and to file unemployment reports. A sole proprietor with no employees can often use a Social Security number for federal tax. Don’t pay a website to apply for you.
2. Register only the Minnesota taxes that apply. Register for a Minnesota tax ID and a sales and use tax account before you make taxable sales in Minnesota¹. A business that sells only nontaxable items does not need a sales tax account³. Start at the registration guide. One Minnesota tax ID covers the tax types you activate.
3. If you sell taxable goods or services and you have a location here, register for sales tax. A physical location in Minnesota, such as an office, warehouse, or distribution, sales, or sample room, is its own reason to register³. The state rate is 6.875%. Some cities and counties add a local sales and use tax. Every seller collects that local tax based on where the customer receives the product or service. Look up the address in the Sales Tax Rate Calculator². Sales and use tax returns are filed online in e-Services⁴.
4. Use the filing frequency the department assigns from your tax. More than $500 a month is due the 20th day of the following month. $100 to $500 a month is due April 20, July 20, October 20, and January 20. Less than $100 a month is due February 5 of the following year⁴. You may not get a reminder.
5. If you sell into Minnesota and you have no location here, read the small-seller rule before you collect anything. You are over it at either 200 or more retail sales shipped to Minnesota, or more than $100,000 in retail sales shipped to Minnesota, over the prior 12 months³. One sale of several items is one retail sale. Having a location takes you out of that shortcut and back to step 3.
6. If you pay Minnesota income tax as a person, use the 2026 brackets. They are 5.35%, 6.80%, 7.85%, and 9.85%, with the bracket set by filing status and taxable income. Estimated tax that uses them begins in April 2026 for tax year 2026 estimated payments⁵. The annual return is due April 15 of the following year for most people⁶, on the department’s due-dates page. This page does not compute the tax.
7. If the business is taxed as a C corporation, calendar the franchise return. File it the same day the federal income tax return is due. The rate is 9.8%¹⁹. You get an automatic seven-month extension to file, with no Minnesota form required. The extension moves the filing date, not the payment. The minimum fee is in addition to the regular tax and the alternative minimum tax¹⁰.
8. Read the 2026 minimum-fee table before you assume the fee is zero. Under $1,280,000 it is nothing. From that amount through the next bracket it is $260. The next bracket is $770, then $2,560, then $5,140, and $12,830 at the top. The minimum-fee page lists who is outside the fee, including some farming partnerships and some investment entities. The fee does not apply to a single-member LLC that reports only on the member's Form M1. An LLC that files as a partnership is subject to the fee once its Minnesota property, payroll, and sales or receipts pass the threshold⁷.
9. If the business is an S corporation or a partnership, file that return. An S corporation files Form M8, due generally March 15 of the following year for a calendar year⁸. Most S corporation income is taxed after it passes through to the shareholders⁷. A partnership files Form M3, due March 15 of the following year for a calendar year⁹. The election is federal, on Form 2553²⁰. This page does not pick it.
10. Register for withholding before you withhold. The penalty for failing to register first is $100. Collect a federal Form W-4 and Minnesota Form W-4MN from each employee before work starts. A Michigan or North Dakota resident who gives you Form MWR is not withheld for Minnesota income tax. You still send the department that form. Report new hires and rehires within 20 days to the Minnesota Department of Human Services¹¹, from the instructions on the new employer guide. The hiring guide covers the federal side.
11. Register for unemployment tax when you first pay covered wages, not before. Do not register until covered wages have actually been paid. Then do it as soon as possible after the first covered wages are paid, and before the first quarterly wage report is due¹³, at Unemployment Insurance Minnesota. Wages of owners, officers, or members who own 25 percent or more are not covered unless you elect coverage. A corporation or LLC that pays only those people does not have to register. A sole proprietor who pays only a spouse, parents, or children under 18 does not have to register. A federal tax classification as a partnership or a disregarded sole proprietorship does not change unemployment coverage for officers or members¹⁴.
12. Read the 2026 unemployment rate as three pieces, not one number. The wage base is $44,000: only the first $44,000 of wages you pay each employee in 2026 is taxed. The base rate is 0.4%. Experience rating is capped at 8.9%. The new-employer rate is assigned from the average for your industry, not one rate for every new employer. On top of the tax, the additional assessment for 2026 is 14%¹². That percentage applies to the UI tax. It is not added to the rate as percentage points. The rate page has the industry table.
13. Add Paid Leave when you have covered employees. Premiums are due the last day of the month after the calendar quarter¹⁵, with the wage detail report. The statute sets the starting rate for an employer in both programs at 0.7%. The commissioner may adjust the rates, and must set the next year's rates by July 31. The cap is 1.1%. The employer pays at least half of the premium. Any employee deduction is the rest, and it cannot drop the wage below the required minimum. A small employer, one with 30 or fewer employees and an average wage at or below 150 percent of the state's average wage, pays 75 percent of the annual premium rate. The wage cap is the same maximum earnings subject to Social Security tax that year. An employer with an approved private plan does not pay the state premium¹⁶. The small employer premium page lists the rate DEED now assigns as 0.88%, or 0.66%¹⁷ for a small employer. Use the percentage on your Paid Leave Premium Rate Notice.

What you get back

An EIN from the IRS if you applied, a Minnesota tax ID only for the taxes you registered, and an unemployment account once you have paid covered wages and registered. There is no separate state business-license number in this step. Local and trade licenses are on Licenses and permits.