2026 tax year · Minnesota
Marketplace seller taxes in Minnesota
Etsy, eBay, Shopify and the rest report your gross and withhold nothing. The gap between that and what you are actually taxed on is your costs, in Minnesota that gap is worth $7,407 in tax.
Take a driver who grossed $45,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the marketplace seller page $26,775 comes off and $18,225 is left as taxable profit. That profit is what Minnesota and the IRS charge against.
What that leaves you owing in Minnesota
Minnesota uses graduated 2026 income tax brackets topping out at 9.85%, across 4 brackets, on top of federal income tax and self-employment tax.
| Self-employment tax | $2,575 |
| Federal income tax | $67 |
| Minnesota income tax | $906 |
| Total tax | $3,548 |
| Effective rate on gross | 7.9% |
Earning more in Minnesota
A single filer taking the standard deduction, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:
| Volume | Gross | Mileage off | Taxable profit | Minnesota tax | Total tax | Rate on gross |
|---|---|---|---|---|---|---|
| Part-time | $15,000 | $0 | $15,000 | $746 | $2,865 | 19.1% |
| Steady side income | $45,000 | $0 | $45,000 | $2,376 | $10,956 | 24.3% |
| Full-time | $72,000 | $0 | $72,000 | $4,082 | $18,886 | 26.2% |
Switching state opens that state's page.
Enter your numbers and press Calculate to see your 2026 estimate.
Minnesota specifics that change the number
Minnesota is one of the twelve states that still taxes Social Security benefits, which matters if you are drawing benefits alongside self-employment income.
Selling into and out of Minnesota
Income tax follows you: Minnesota taxes your profit wherever the buyer was. Sales tax does not. Marketplace facilitator laws make the platform collect and remit sales tax on your behalf in most states, which is why a seller can have customers in all fifty and still file only one income tax return. Selling off-platform is where that stops being true.
On $18,225 of profit, what the states around Minnesota would charge:
| State | Its tax | vs Minnesota |
|---|---|---|
| North Dakota | $0 | −$975 |
| South Dakota | No income tax | −$975 |
| Wisconsin | $673 | −$302 |
| Iowa | $693 | −$282 |
- North Dakota would take $975 less, $0 against Minnesota's $975.
- South Dakota has no income tax at all, so the same work done there costs $975 less in state tax than it does in Minnesota.
- Wisconsin would take $302 less, $673 against Minnesota's $975.
- Iowa would take $282 less, $693 against Minnesota's $975.
Marketplace seller tax questions in Minnesota
How much should a Minnesota seller set aside?
About 7.9% of gross on the $45,000 example, $3,548 across self-employment tax, federal income tax and $906 to Minnesota. Set aside from each payout rather than finding it in April.
Does the $45,000 on my 1099-NEC match what Minnesota taxes?
No. Minnesota taxes profit, not gross. After $26,775 of deductions the taxable figure is $18,225, so the Minnesota bill is $906 rather than what gross alone would suggest.