Dear XXXXX -
You are not required to pay MN unemployment on your wages. They are subject to federal unemployment. Additionally, if you choose exemption from MN unemployment you are subject to an additional 5.4% federal tax on your wages subject to federal tax.
You will need to determine your state rate and taxable wages and compare it to the potential federal tax to see which method costs less.
See Part 3 of Form 940: http://www.irs.gov/pub/irs-pdf/f940.pdf