Hotel And Lodging Tax In Minnesota 2026: TOT Rates By City

How Minnesota's Hotel and Lodging Tax Works

Minnesota calls its lodging levy exactly that, a lodging tax, and there is no single statewide rate. Minn. Stat. § 469.190 gives cities and towns general authority to adopt a lodging tax of up to 3% on stays under 30 days, but many of Minnesota's largest tourism markets operate under separate state laws that allow a higher rate.

Under the general law, a city that adopts the 3% lodging tax must dedicate 95% of what it collects to its local convention and tourism bureau, keeping only 5% for administrative cost. Cities that want a higher rate, or that adopted a lodging tax before the general law existed, need their own special law passed by the Minnesota Legislature. Minneapolis, St. Paul, Rochester, and Duluth are among the cities operating under this kind of individual authorization rather than the default statute, which is why their actual combined lodging tax burden looks nothing like the 3% figure most searches return first.

Lodging tax applies to hotels, motels, resorts, and short-term rentals such as Airbnb and Vrbo listings, wherever the stay is shorter than 30 days. Longer bookings fall outside the tax entirely under both the general law and most special laws.

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Tax Rates and Extra Fees

Because so many Minnesota cities operate under their own special legislation, lodging tax rates vary more than the 3% general-law cap would suggest, and in the state's largest hotel markets, several separate city and county taxes apply to the same room at once.

Minneapolis is the clearest example of Minnesota's stacked-tax approach. Its 3% entertainment tax and 0.5% general city sales tax are not part of the lodging tax at all, they are separate city taxes that happen to apply to hotel rooms because lodging counts as a taxable sale within city limits. A hotel folio in downtown Minneapolis can show state sales tax, city sales tax, city lodging tax, city entertainment tax, and one or more Hennepin County taxes as five or six distinct lines, not one combined percentage.

Outside the Twin Cities, most Minnesota tourism towns rely on a single lodging tax under the general law rather than a formal tourism improvement district, so the extra layering seen in Minneapolis and St. Paul is the exception rather than the rule statewide.

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Collection and Remittance

Guests pay Minnesota's lodging tax as part of their room charge, but the operator, whether a hotel, resort, or short-term rental host, is legally responsible for collecting and remitting it. The Minnesota Department of Revenue directly administers and collects lodging tax for only four jurisdictions: Minneapolis, St. Paul, Rochester, and Biwabik. Every other city that has adopted a lodging tax handles its own billing, collection, and enforcement, typically through its finance or clerk's office, and filing frequency for state-administered accounts can be monthly, quarterly, or annual depending on the amount collected.

Airbnb and Vrbo remit lodging tax automatically in some Minnesota jurisdictions but not all, and platform coverage does not always match city boundaries exactly, so a host renting through multiple channels should confirm which bookings are actually being remitted for them rather than assuming full coverage.

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Minnesota's Fee Transparency Rules

Minnesota's junk-fees law, HF 3438, took effect January 1, 2025, and it applies directly to hotels and resorts. Any mandatory fee that a guest cannot reasonably avoid, a resort fee or amenity fee, for example, must be built into the advertised, displayed, or quoted room price rather than added at checkout. The Minnesota Attorney General can investigate violations and impose civil penalties of up to $25,000 per violation, plus recover investigation costs and attorneys' fees.

This is a statewide requirement, not a big-city ordinance, so it applies just as much to a resort on the North Shore as it does to a downtown Minneapolis convention hotel. Properties in the Minneapolis-St. Paul airport area had until June 1, 2025, to comply, since prices there are regulated separately by the Metropolitan Airports Commission.

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Exemptions From Minnesota's Hotel Tax

Minnesota's lodging tax exempts stays of 30 days or more under both the general law and most special city laws, since the tax is defined to apply only to lodging rented for fewer than 30 consecutive days. Once a guest's stay reaches that threshold, the charge falls outside the lodging tax's scope entirely, though the property should still keep documentation showing the stay was booked or extended to 30 days or more, since an exemption applied incorrectly is the operator's liability to correct.

Government employees traveling on official business are not automatically exempt from Minnesota's lodging tax the way they may be from certain other state taxes; exemption rules vary by which specific city ordinance or special law applies, so hotels should check local rules rather than assume a blanket government exemption applies statewide.

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Common Mistakes Hotels Make With TOT Compliance

• Applying the general law's 3% cap to every city. Minneapolis, St. Paul, Rochester, and Duluth all operate under special legislation that allows rates well above 3%; using the general-law figure statewide undercharges guests in these markets.
• Missing the Duluth property-size threshold. Duluth's extra 1% and 1.5% surtaxes apply only to facilities with more than 30 rooms, so two nearby properties can legally owe different combined rates.
• Folding the entertainment tax into the lodging tax line. In Minneapolis, the 3% entertainment tax and 3% lodging tax are two distinct city taxes; combining them into a single line item can misstate what is owed to which fund and complicate an audit.
• Advertising a room rate that excludes a mandatory resort fee. Since January 1, 2025, Minnesota's junk-fees law requires any unavoidable fee to be built into the advertised price, not added at checkout.
• Assuming the state collects every city's lodging tax. The Minnesota Department of Revenue only administers lodging tax directly for Minneapolis, St. Paul, Rochester, and Biwabik; every other city expects the property to remit locally, on that city's own schedule.
• Not retraining staff after a special-law rate change. Because so many Minnesota cities' lodging tax rates come from individual legislative acts rather than a uniform statute, a rate increase can take effect on a city-specific date that generic tax-rate spreadsheets may not flag.

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Where A PMS Fits Into TOT Compliance

This is not about software so much as it is about keeping five or six differently sourced tax lines straight on a single Minneapolis folio, or knowing that the Duluth property down the street owes a different rate because of its room count. A property management system that lets a hotel configure each tax, state sales tax, city lodging tax, city entertainment tax, and any county-level tax, as its own line with its own rate handles a special-law rate change without a full repricing project. Revenue reports broken out by date range help reconcile what was actually collected against what a state-administered account like Rochester's should show, and a booking engine that displays the full, fee-inclusive price upfront keeps a property aligned with Minnesota's 2025 junk-fees law by default.

Frequently Asked Questions

1. Does Minnesota have a statewide hotel tax rate?

No. Minnesota's general law caps most cities' lodging tax at 3%, but Minneapolis, St. Paul, Rochester, Duluth, and other major markets operate under individual state legislation that allows higher rates, so there is no single number that applies everywhere.

2. What is Minnesota's hotel tax?

Minnesota calls it a lodging tax. It is a city-level charge added to stays under 30 days at hotels, motels, resorts, and short-term rentals, and the rate depends entirely on which city's ordinance or special law applies.

3. What is Minnesota's lodging tax?

Lodging tax is Minnesota's official term for what other states call hotel tax, room tax, bed tax, occupancy tax, or TOT; they all refer to the same local charge on short-term stays.

4. How long does a guest have to stay in Minnesota to be exempt from lodging tax?

Thirty days. Once a stay reaches 30 consecutive days, it falls outside the definition of taxable lodging under both the general law and most city-specific special laws.

5. Does Minnesota require hotels to disclose the full price including fees before checkout?

Yes. Minnesota's junk-fees law, effective January 1, 2025, requires any mandatory fee a guest cannot reasonably avoid to be included in the advertised or quoted room price rather than added later.

6. Who is responsible for filing and remitting Minnesota's lodging tax?

The property, hotel, resort, or short-term rental host, is legally responsible for collecting the tax from guests. The Minnesota Department of Revenue collects it directly only for Minneapolis, St. Paul, Rochester, and Biwabik; every other city administers its own lodging tax.

7. Why is the hotel tax in downtown Minneapolis so much higher than 3%?

Because Minneapolis lodging is subject to several separate taxes at once, a 3% city lodging tax, a 3% entertainment tax, a 0.5% general city sales tax, the 6.875% state sales tax, and multiple Hennepin County taxes, that together push the combined rate on a downtown convention hotel room to roughly 15%.