Merchant Services in Minnesota
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What a Minnesota business needs to know before taking card payments: the state sales tax rate, what the law says about card surcharges, and what it costs to form an LLC. Every figure below comes from an official Minnesota page or statute and links to it. Checked 2026-10-16.
Minnesota at a glance
| Item | What we found | Source |
|---|---|---|
| State sales tax base rate | 6.875% | Official source |
| Card surcharge rule | Allowed with limits | Official source |
| LLC formation fee | $135.00 | Official source |
| LLC recurring fee | $0.00 every year | Official source |
| Wage income tax | Up to 9.85% | Official source |
Card surcharges in Minnesota
What the statute says
Minnesota Statutes 325G.051 allows a surcharge on credit or charge cards if the seller discloses it (orally and by a sign in person; a notice online or in an app; orally by phone) and the surcharge does not exceed five percent of the purchase price. A seller that violates it is subject to a civil penalty of up to $500 and must refund the surcharge.
Minnesota caps a surcharge at 5% of the purchase price. On a $100 sale, that is $5.00, which is above your card cost of $3.20, so in Minnesota the tighter limit comes from Visa's rule, not the state.
Worked example: a $100 card sale
Using a published online card rate of 2.9% + $0.30 (Stripe, checked 2026-10-15), a $100 sale costs you $3.20 to process.
| Your card cost | $3.20 |
|---|---|
| Visa's limit for credit cards (lower of your cost or 3%) | $3.00 |
| Minnesota's limit | $5.00 |
| Most you could add on this sale | $3.00 |
| Share of your card cost that covers | 94% |
Visa's own rule: Visa's Q&A says U.S. merchants may surcharge credit cards (not debit or prepaid) up to the merchant discount rate for the card or 3%, whichever is lower, must disclose it as a merchant fee at the point of entry, point of sale or checkout and on the receipt, and must notify their acquirer at least 30 days before starting.
This is arithmetic from published rules, not legal advice. Visa's rules apply to credit cards only (not debit or prepaid), require disclosure, and require notice to your processor before you start. Ask your processor before you surcharge.
See the surcharge laws for all states ·Try the surcharge calculator
Sales tax in Minnesota
The state base rate is 6.875%, which we read on the official page (the same as the sales tax rate (6.875%, though local taxes may also apply)). That is the 41 lowest of the 46 states whose base rate we have verified. On a $100 purchase the state tax is $6.88; on a $1,250 purchase it is $85.94.
Local taxes may apply on top of the state rate, and the exact rate depends on the address.
Forming an LLC in Minnesota
The state filing fee for an LLC is $135.00, which is the 35 lowest of the 48 states whose formation fee we have verified.
By mail; $155 for expedited in-person or online filing.
After that, Minnesota charges $0.00 every year (annual renewal), so the state fees in the first year are about $135.00.
The fee schedule lists the Chapter 322C (LLC) annual renewal at $0; reinstatement after a missed renewal costs $65 to $85.
Minnesota filing office ·How to start an LLC
Paying employees in Minnesota
Minnesota taxes wages with graduated rates, topping out at 9.85%.
As a rough estimate, a single employee paid $2,000 every two weeks would have about $77.41 of Minnesota income tax withheld per paycheck. This is an estimate and does not include credits or local taxes.
Rates per the Minnesota revenue department's official 2026 page.
What this means for a Minnesota business
A surcharge is possible in Minnesota but it must stay within the limit above and be disclosed the way the law requires.
Frequently asked questions
Can I add a credit card surcharge in Minnesota?
Yes, within limits. Minnesota Statutes 325G.051 allows a surcharge on credit or charge cards if the seller discloses it (orally and by a sign in person; a notice online or in an app; orally by phone) and the surcharge does not exceed five percent of the purchase price. A seller that violates it is subject to a civil penalty of up to $500 and must refund the surcharge.
What is the sales tax in Minnesota?
The state base rate is 6.875%. Local taxes may apply.
How much does it cost to form an LLC in Minnesota?
The state filing fee is $135.00.
Other state pages
We publish a state page only when the sales tax rate, the LLC formation fee and the surcharge rule are all verified from official sources.