Minnesota

Moving from New Mexico to Minnesota would RAISE your total state and local tax burden from 10.2% of income to 12.1% of income — an increase of +1.9 pts. On a $100K household budget, that is roughly $1900 more per year in combined state and local taxes.

Minnesota top marginal income tax rate is 9.85%, versus 5.9% in New Mexico. Compare across your expected income bracket — top rates kick in at different thresholds in each state.

Minnesota state sales tax is 6.88%. With average local add-ons, the combined rate is 8.12%. This applies to most retail purchases but rules on groceries, prescriptions, and services vary.

Minnesota median effective property tax rate is 1.04% of home value. On a $400,000 home, that is roughly $4,160/year. Property tax typically funds schools, municipalities, and county services — rates vary sharply within a state by school district.

Minnesota imposes annual vehicle property or ad valorem tax. Expect a recurring annual assessment based on the vehicle's value or registration class, in addition to one-time sales tax at purchase. Budget for this ongoing cost.

Minnesota imposes a state estate tax with a threshold of $3.0M. Estates above this threshold pay state-level tax in addition to federal. No state inheritance tax applies.

In Minnesota: Social Security is partially taxed. Pensions and 401(k)/IRA withdrawals are fully taxed.

Minnesota capital gains treatment: Taxed as regular income up to 9.85%; +1% surtax on net investment income above $1M. Compare to federal long-term capital gains rates (0%, 15%, or 20%) — some states offer preferential treatment for long-term holdings, while others tax capital gains as ordinary income.

Minnesota gas tax is 31.3¢/gal — 12.4¢/gal higher than New Mexico's 18.9¢/gal. For a 15,000 mile/year driver getting 25 mpg, each 1¢/gal of gas tax = about $6/year.

Minnesota residency rules: 183-day rule + permanent abode = statutory residency. Strict audit of retained MN connections. To establish residency for tax purposes, typical steps include: update driver's license and vehicle registration, register to vote, file a homestead declaration, close home-state bank accounts where possible, and spend clearly more than 183 days in your new state. If your former state is aggressive (e.g., CA, NY, NJ, OR), keep documentation of every day spent in each state.

Minnesota recent tax law changes: Added 1% net investment income surtax 2024. Social Security subtraction expanded (most taxpayers now exempt). Paid leave program funded starting 2026 (0.7% payroll tax). Updated 2025 tax forms to reflect federal H.R. 1 (2025 Tax Budget and Reconciliation Bill) changes.

For the most current tax information in Minnesota, visit the official source at https://www.revenue.state.mn.us/. Tax laws change annually; verify rates and rules before making a permanent move. Consult a CPA for advice specific to your situation.