How to close a restaurant in Minnesota follows the same general framework as closing anywhere, but Minnesota has specific rules on final paycheck timing, liquor license transfer, and sales tax that differ from other states. Here is what Minnesota restaurant owners need to know.
Final paycheck requirements in Minnesota
Minnesota law requires that employees receive their final paycheck on the next regularly scheduled payday after termination. If you close without advance notice, final paychecks are due within 24 hours of demand if the employee requests payment in person at the employer's place of business.
Minnesota does not require employers to pay out accrued vacation or PTO upon termination unless the employer's written policy promises it. However, if your employee handbook or any written agreement states that unused PTO is paid out at termination, you are legally bound to honor that.
The Minnesota Department of Labor and Industry (dli.mn.gov) enforces wage payment laws. Violations can result in penalties of up to 15 percent of the unpaid wages plus attorney fees.
Liquor license rules in Minnesota
Minnesota liquor licenses are issued by local municipalities (cities and counties), not the state. This means the rules for surrendering or transferring a license vary by city. Minneapolis, Saint Paul, and other large cities have their own liquor control offices with specific procedures.
In general, to surrender a Minnesota liquor license, you notify the issuing municipality in writing of your closure date and return the physical license. To transfer a license to a buyer, the buyer must apply to the municipality for a new license -- licenses are not directly transferable in most Minnesota jurisdictions.
Minnesota has a quota system for on-sale liquor licenses in some municipalities, which means licenses in those areas may have secondary market value. Check with a local liquor license attorney before surrendering a license in a quota city.
Sales tax final return in Minnesota
Minnesota requires businesses to file a final sales tax return with the Minnesota Department of Revenue (revenue.state.mn.us) when closing. The final return covers the period from your last return through your closure date.
You must also cancel your Minnesota sales tax permit. This can be done online through the Minnesota Department of Revenue's e-Services portal. Cancel the permit after filing your final return, not before.
Minnesota's sales tax rate is 6.875 percent at the state level, with additional local taxes in many jurisdictions. Restaurants that collected sales tax on food and beverage sales must remit all collected taxes before closing.
WARN Act considerations in Minnesota
The federal WARN Act requires employers with 100 or more full-time employees to provide 60 days advance notice before a plant closing or mass layoff. Most independent restaurants in Minnesota do not meet this threshold.
Minnesota does not have a state-level WARN Act equivalent, so the federal threshold applies. If your restaurant has fewer than 100 full-time employees -- which covers the vast majority of independent operators -- you are not subject to WARN Act notice requirements.
LLC dissolution in Minnesota
If you operated your restaurant as a Minnesota LLC, you must file Articles of Dissolution with the Minnesota Secretary of State (sos.state.mn.us). The filing fee is $35. You can file online through the Secretary of State's business filing system.
Before dissolving, you must pay all outstanding Minnesota taxes, including sales tax, payroll taxes, and any applicable franchise taxes. The Secretary of State will not process the dissolution if there are outstanding tax obligations.
After filing the Articles of Dissolution, your LLC has a winding-up period during which you can settle outstanding debts, distribute remaining assets, and close bank accounts. The dissolution is effective when the Secretary of State processes the filing.
Minnesota-specific closing checklist
- Notify employees and pay final wages per Minnesota timing requirements
- File final Minnesota sales tax return and cancel sales tax permit
- Notify local municipality of liquor license surrender or transfer
- File final Minnesota payroll tax returns (Form MN UI-33 for unemployment insurance)
- File Articles of Dissolution with Minnesota Secretary of State ($35 fee)
- Cancel Minnesota business license if applicable
- Notify Minnesota Department of Health of food establishment closure
Related guides: How to close a restaurant: the complete guide | What happens to employees when a restaurant closes? | Restaurant liquor license: what happens when you close