Minnesota Vacation Rental Tax Calculator

Estimate your property tax, lodging tax, federal & state income tax, and depreciation deductions for your Minnesota vacation rental property.

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Tax Types

What Taxes Apply to Minnesota Short-Term Rentals?

Minnesota STR hosts are subject to several types of taxes. Understanding which ones apply — and who collects them — is the first step toward compliance.

Sales Tax

Minnesota applies its state sales tax to short-term rental stays — currently at a base rate that contributes to combined lodging rates of 13.625%. Cities may add local sales tax on top.

Occupancy / Transient Lodging Tax

Minnesota's lodging/occupancy tax is the primary STR-specific tax. Combined rates reach 13.625% in Minneapolis and 11.375% in Duluth. This includes state, county, and city-level components.

Tourism / Convention Center Tax

Some Minnesota cities levy additional tourism, convention center, or special district taxes that add 1–3% to your total rate. In Minneapolis, the combined rate of 13.625% already includes these surcharges.

Federal & State Income Tax

Net rental profit is subject to both federal income tax (10–37% in 2026) and Minnesota's state income tax at 7.85%. Reported on Schedule E (Form 1040). Deduct expenses like mortgage interest, repairs, and depreciation.

Property Tax

Minnesota's average effective property tax rate is 1.12%. Assessed annually on market value. STRs may face higher assessments in some jurisdictions.

Important

Does Airbnb Collect and Remit Taxes in Minnesota?

Airbnb has agreements to collect and remit taxes in Minnesota — but coverage is not always complete.

Airbnb collects Minnesota's state-level lodging tax in most jurisdictions.
In Minneapolis and Duluth: Airbnb may or may not collect all county/city taxes.
Rural areas: You're often fully responsible for all local tax collection.
Even where Airbnb collects, you may owe additional local levies or special district taxes.

Bottom line: Never assume Airbnb handles all your Minnesota tax obligations. Verify with your local tax authority.

Compliance

Do You Need a Tax Permit in Minnesota?

In most Minnesota jurisdictions, yes. Common permits and registrations required:

State sales tax permit / seller's permit
City or county business license
Short-term rental operating permit
Lodging tax registration certificate

Consequences of non-compliance

5–25% penalties on unpaid taxes in Minnesota

Revocation of rental permit

Liens on your property

Tax Overview

Short-Term Rental Taxes in Minnesota

Key tax facts every vacation rental host in Minnesota should know.

State sales tax: 6.875% (applies to lodging)

City lodging taxes: 3–6% additional

State income tax: up to 9.85% (7.85% effective)

Property tax rate: ~1.12%

City Breakdown

Lodging Tax Rates by City in Minnesota

Combined lodging/occupancy tax rates for major vacation rental markets in Minnesota.

CityCombined Rate

Minneapolis

6.875% state + 3% city + 3% convention + 0.75% special

13.625%

Duluth

6.875% state + 4.5% local

11.375%

Grand Marais

6.875% state + 3.125% local

10%

Rates are estimates based on 2024-2025 data. Always verify with your local tax authority.

FAQs About Minnesota Vacation Rental Taxes

Common questions about short-term rental taxes, permits, and compliance in Minnesota.

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