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					                                 Minnesota
                                 Sales and
                                 Use Tax
                                 Instruction Booklet
                                 (Revised December 2007)
                                 (Instructions for amending a return on pages 20-21 revised 1/09)




Inside this booklet              Need help with your taxes?
                                 We’re ready to answer your questions!
 Who needs to register?
 Minnesota sales and local       Phone:    651-296-6181
 taxes                                     or toll-free 1-800-657-3777
 What’s taxable?                           Minnesota Relay 711 (tty)
 What’s not taxable?
 General filing information
                                 E-mail:   salesuse.tax@state.mn.us
 Preparing to file your return
 Filing electronically           600 North Robert Street, St. Paul, MN 55146-6330
 Claiming a refund               Hours: 7:30 a.m. – 5:00 p.m. Monday through Friday

 Amending a return               Information in this booklet is available in other formats upon
                                 request for persons with disabilities.




                                 File your return electronically at
                                 www.taxes.state.mn.us.




                                                 1
Who needs to register?
You must register to collect sales tax if you   and the retailer and entity are related           •	 are in a locality that imposes a new
make taxable retail sales in Minnesota.         parties. A retailer and entity are related           local sales and use tax. (We will
This includes sellers outside Minnesota         parties if at least one of the following is          generally automatically add the new
who:                                            true:                                                local tax.)
•	 have	an	office;	distribution,	sales,	or	     •	 one	of	the	parties	owns	directly	or	in-
   sample	room	location;	warehouse	or	                                                            •	 begin selling a product or service
                                                    directly	at	least	50	percent	of	the	other	       that is reported separately such
   other	place	of	business	in	Minnesota,	           party’s	outstanding	stock;	
   either	directly	or	by	a	subsidiary;	                                                              as	liquor	(on	or	off-sale),	car	rentals,	
                                                •	 one	of	the	parties	is	a	partnership,	es-          waste	hauling	services,	etc.	If	you	file	
•	 have	a	representative,	agent,	salesper-          tate or trust that owns directly or indi-        your	return	on	the	Internet,	you	can	
   son,	canvasser,	or	solicitor	in	Minneso-         rectly	at	least	50	percent	of	the	capital,	      add	these	tax	types	when	filing.	If	you	
   ta,	on	either	a	permanent	or	temporary	          stock,	or	value	of	the	other	party;	or	          file	by	phone,	you	must	call	our	office	
   basis,	who	operates	under	the	authority	                                                          to add them.
   of the retailer or its subsidiary for any    •	 an	individual	stockholder	or	the	
   purpose,	such	as	repairing,	selling,	            stockholder’s family owns directly or         •	 find	your	taxable	sales	have	increased	
   delivering,	installing,	soliciting	orders	       indirectly	at	least	50	percent	of	the	           so that you are required to file
   for	the	retailer’s	goods	or	services,	or	        value	of	outstanding	stock	of	both	enti-         more often	(see	the	“General	filing	
   leasing	tangible	items	in	Minnesota;	            ties.                                            information” section).
•	 deliver	items	into	Minnesota	in	their	       For	example,	if	two	entities	are	related	and	     •	 close	your	business.	
   own	vehicles;	or	                            the	in-state	entity	advertises,	promotes	
                                                or facilitates the establishment or main-         Notifying	us	of	significant	changes	in	the	
•	 provide	taxable	services	in	Minnesota.	      tenance of a market in Minnesota for an           structure or location of your business will
See	Revenue	Notice	#00-10,	Sales	and	           out-of-state	seller,	the	in-state	entity	cre-     help	you	avoid	tax	bills	and	periods	of	
Use	Tax	–	Nexus	Standards	for	criteria	on	      ates nexus for the out-of-state seller.           noncompliance.	If	you	have	a	Minnesota	
determining when an out-of-state retailer                                                         tax	ID,	you	can	make	some	changes	on-
                                                In	addition,	if	the	in-state	entity	provides	     line,	or	you	can	call	our	office.
is	required	to	register,	collect	and	remit	     services	to	the	out-of-state	seller	(such	as	
Minnesota sales or use tax on sales made        accepting returns from the seller’s custom-
into Minnesota.                                                                                   Multiple locations
                                                ers,	resolving	complaints	from	the	seller’s	
                                                                                                  If you operate your business from more
If you make retail sales in any city or         customers,	etc.),	the	in-state	entity	also	
                                                                                                  than	one	permanent	physical	location,	
county	with	a	local	sales	tax,	you	must	also	   creates nexus for the out-of-state seller.
                                                                                                  you may choose to apply for separate ID
register to collect that local tax (see Fact                                                      numbers	and	file	separate	tax	returns	for	
Sheet 164, Local Sales and Use Taxes,	for	a	    How to register or report                         each	location,	or	hold	a	single	ID	number	
listing of local taxes).
                                                business changes                                  and	file	one	consolidated	tax	return	for	all	
If	you	sell	only	nontaxable	items,	you	do	      You may register for a Minnesota ID               locations.
not need to register for sales tax.             number online at: www.taxes.state.mn.us           Examples of separate physical locations:
If	you	do	not	make	taxable	sales,	but	make	     or	by	calling	651-282-5225.		The	Applica-         •	 permanent	storefronts	where	retail	
purchases	subject	to	use	tax,	you	must	         tion	for	Business	Registration,	Form	ABR,	           sales are made.
register to remit use tax. See the section      is	available	on	our	website	or	request	one	
                                                                                                  •	 kiosks	in	a	mall.
“Minnesota and local taxes” for more            by	writing:		Minnesota	Tax	Forms,	Mail	
information about use tax.                      Station	1421,	St.	Paul,	MN	55146-1421.            The following are not separate physical
                                                                                                  locations:
It is against the law to make taxable retail    You must notify us if you:
                                                                                                  •	 persons	who	sell	at	craft	shows	(unless	
sales	or	provide	taxable	services	in	Min-       •	 change	your	legal organization (from              the location is permanent).
nesota without being registered.                   individual	to	partnership	or	LLC,	part-        •	 vending-machine	operators	who	have	
                                                   nership	to	corporation,	etc.).	                   more	than	one	vending-machine	loca-
Affiliate nexus. Affiliates	of	Minnesota	
                                                •	 add or close a location.                          tion.
businesses are required to collect and
remit Minnesota sales tax on sales made         •	 begin	making	sales in a city or                •	 persons	who	perform	services	at	vari-
into	Minnesota.	An	entity	is	an	affiliate	         county with a local tax (see Fact                 ous	locations,	such	as	a	janitorial	ser-
of a Minnesota business if the related             Sheet 164, Local Sales and Use Taxes,	for	        vice	or	a	landscaper	who	moves	from	
entity	promotes	the	affiliate’s	business	or	       a	listing	of	local	taxes).	If	you	file	your	      job	to	job	at	various	locations.	
provides	services	to	the	out-of-state	entity	      return	on	the	Internet,	you	can	add	           •	 persons	doing	business	from	a	vehicle	
                                                   a	local	tax	when	filing.	If	you	file	by	          that	moves	from	place	to	place.	
                                                   phone,	you	must	call	our	office	to	add	a	
                                                   local tax.



                                                                      2
 Who needs to register? (continued)
Operators of selling                           to be in business and must collect sales tax     An organizer can accept a written state-
                                               on all retail sales of taxable items unless it   ment from sellers who make isolated
events                                         falls	under	the	“occasional	sales”	provision.    or occasional sales indicating that they
Before	an	operator	of	a	county	fair,	craft	                                                     meet	the	above-mentioned	criteria.		The	
show,	art	fair,	flea	market,	trade	show,	or	   Occasional sales provisions applicable at
                                                                                                isolated	and	occasional	sale	provision	for	
similar	selling	event	can	rent	space	to	a	     flea markets and similar events.
                                                                                                businesses	does	not	apply	at	these	events.	
person	to	sell	at	the	event,	the	operator	     The	law	allows	a	seller	at	a	flea	market	
must	have	written	documentation	from	                                                           Penalty.	Operators	who	do	not	have	Form	
                                               or	other	similar	event	to	qualify	for	the	
the	seller	that	they	hold	a	valid	sales	tax	                                                    ST19	or	a	similar	written	statement	from	
                                               isolated and occasional sales exemption if
registration,	or	a	written	statement	from	                                                      sellers	can	be	fined	$100	for	each	seller	
                                               all of the following are met:
the seller that no taxable items are being                                                      that is not in compliance for each day of
sold.	Form	ST19,	Operator Certificate of       •	 The	seller	participates	in	only	one	          the	selling	event.	
Compliance,	is	available	for	this	purpose.	       event	per	calendar	year	that	lasts	no	
                                                                                                Fact Sheet 148, Selling Event Exhibitors
You	can	find	this	form	on	our	website	at	         more	than	three	days;
                                                                                                and Operators; Revenue Notices 95-04 and
www.taxes.state.mn.us.                         •	 The	seller	makes	sales	of	$500	or	less	       98-04.
Anyone who pays consideration of any              during	the	calendar	year;	and
kind	to	sell	at	such	an	event	is	considered	   •	 The	seller	provides	a	written	statement	
                                                  to	that	effect,	and	includes	the	seller’s	
                                                  name,	address,	and	telephone	number.




                                                                     3
Minnesota state and local taxes
Sales tax                                         •	 A	seller	in	another	state	or	country	          Local taxes
Minnesota has a 6.5 percent general sales            does not collect any sales tax from you        We	currently	administer	and	collect	several	
tax rate. The sales tax applies to retail sales      on a sale of an item that is taxed by          local sales and use taxes. The tax applies
                                                     Minnesota’s law.                               to the same items that are taxed by the
of	taxable	services	and/or	tangible	per-
sonal property made in Minnesota. Busi-           •	 A	Minnesota	seller	fails	to	collect	sales	     Minnesota sales and use tax law. You must
nesses collect the sales tax due on items            tax from you on a taxable item.                be registered for any locality if you do
and	services	sold	at	retail	on	behalf	of	the	     •	 An	out-of-state	seller	properly	collects	      business there.
state. See “Retail sales” on this page and           another state’s sales tax at a rate lower      To	figure	the	tax,	combine	the	state	sales	
the “What’s taxable?” section for details.           than	Minnesota’s.	In	this	case,	you	owe	       tax rate and the local rate. Apply the com-
                                                     the difference between the two rates.          bined rate to the taxable sales price and
Retail sales                                      Keep track of your purchases subject to           round to the nearest full cent. (Rate cards
                                                                                                    are	available	on	our	website.)
Most retail sales are taxable in Minnesota.       use tax and report them when you report
A	“retail	sale”	means	any	sale,	lease	or	         your	sales	tax.	Also,	keep	a	record	of	the	       Local	taxes	are	reported	at	the	same	time	
rental of tangible personal property for          purchases	on	which	you	paid	use	tax,	not-         you report your Minnesota sales and use
any	purpose	other	than	resale,	sublease	or	       ing the date reported and paid.                   tax,	but	the	figures	are	reported	separately.	
subrent.                                          If you are located in an area that has a lo-      You must be registered for each local tax
Sales,	leases	and	rentals	are	taxable	regard-     cal	tax,	be	sure	to	also	report	local	use	tax.	   you	report.	Call	our	office	to	register	for	
less of quantity or whether the item is                                                             local	taxes	if	you	file	by	phone.	If	you	file	
                                                  Individuals	as	well	as	businesses	owe	use	        by	Internet,	please	add	the	applicable	local	
new	or	used,	unless	an	exemption	applies.	        tax	on	taxable	purchases	when	they	have	          taxes	when	you	file	your	return.
Some	services	are	also	taxable.                   not	paid	sales	tax.	An	individual,	however,	
                                                  can	purchase	up	to	$770	in	taxable	items	         For more information about local taxes
Use tax                                           for personal use without owing use tax. If        and an up-to-date list of localities that
                                                                                                    have	local	tax,	see Fact Sheet 164, Local
If you buy a taxable item for your own            the	individual	buys	more	than	$770	in	a	
                                                  calendar	year,	that	person	owes	use	tax	on	       Sales and Use Taxes.
use	without	paying	sales	tax,	you	probably	
owe use tax. The tax rate is the same for         all taxable items purchased that year. This
both	sales	and	use	tax,	and	the	same	ex-          exemption does not apply to purchases from        Rate charts
emptions apply. Use tax is paid on taxable        a seller who is required to collect Minnesota     Rate	charts	are	available	at	the	following	
items	and	services	used	in	Minnesota	if	no	       sales or use tax and does not.                    percentages. Download them from our
sales tax was paid at the time of purchase.       Individuals	who	owe	use	tax,	but	are	not	         website	or	call	our	office	to	request	copies.
The general use tax rate is the same as the       required	to	hold	a	sales	tax	permit,	can	file	    State rate - 6.5%
sales	tax	rate,	6.5	percent,	plus	any	appli-      a	use	tax	return	annually,	regardless	of	the	
cable local tax.                                                                                    Various combinations of state and local
                                                  total amount of purchases. These returns
                                                                                                    tax:
While sales tax is collected by the seller        are	due	by	April	15	of	the	following	year.	
                                                                                                    6.50%		         8.00%	           10.00%
and	paid	to	the	state	by	the	seller,	use	tax	     The	return	may	be	filed	and	paid	using	e-         6.65%		         9.00%	           10.15%
is self-assessed and paid by the purchaser        file	Minnesota.	Go	to	our	website	at	www.         7.00%		         9.15%	           12.65%
(end user). The purchaser pays the tax            taxes.state.mn.us	and	click	on	“Login	to	         7.15%		         9.50%	           13.15%
directly to the state.                            e-file	Minnesota”	on	the	e-Services	menu,	        7.50%	          9.65%	           15.65%
Here are some cases when use tax is due:          and enter your Social Security number.
•	 You	buy	taxable	items	by	mail	order,	          Select	“Individual	use	tax”	and	follow	the	
   from	a	shopping	channel,	over	the	             steps	until	you	receive	a	confirmation	
   Internet,	etc.,	and	the	seller	doesn’t	col-    notice.
   lect Minnesota tax from you.                   You	may	also	download	Form	UT1,	Indi-
•	 You	buy	something	exempt	intending	            vidual Use Tax Return,	from	our	website,	
   to	resell	it	in	your	business,	but	instead	    or	contact	our	office	for	a	copy.
   take	it	out	of	inventory	for	business	or	
   personal use.                                   For more information, see Fact Sheets 146,
                                                  Use Tax for Businesses; and 156, Use Tax for
                                                  Individuals.




                                                                        4
Minnesota and local taxes (continued)
Figuring the tax                                •	 Charge	sales	tax	on	shipping,	handling	    •	 When	honoring	a	manufacturer’s	cou-
The following guidelines will help you             and installation charges for taxable          pon,	charge	sales	tax	first,	then	subtract	
determine the sales price on which the tax         items.                                        the coupon amount.
is charged.                                     •	 Charge	sales	tax	on	the	total	price	of	    •	 Gift	certificates	are	treated	the	same	as	
                                                   any	taxable	services.	Do	not	deduct	the	      cash.	Charge	sales	tax,	then	subtract	the	
•	 Deduct	federal	excise	tax	imposed	di-           cost of materials and supplies you used       gift	certificate	amount.	
   rectly on the customer if it is separately      to	provide	the	service.	
   stated on the customer’s bill.                                                             List	the	tax	separately	from	the	sales	price	
                                                •	 Deduct	cash	discounts,	trade	discounts	    for	your	customer	whenever	practical.	You	
•	 For	trade-ins,	charge	sales	tax	on	the	         or	quantity	discounts	you	give	at	the	     can	include	the	tax	in	the	selling	price;	
   difference between the price of the             time of sale.                              however,	you	must	publicly	post	a	notice	
   item you are selling and the trade-in
                                                •	 When	honoring	one	of	your	own	             that states that the price includes all appli-
   allowance. The item traded must be a
                                                   coupons,	subtract	the	coupon	amount	       cable	sales	tax	or	state	on	the	invoice	that	
   taxable item and something you nor-
   mally	sell	in	your	business.		Otherwise,	       first,	then	charge	sales	tax	on	the	       tax is included.
   tax is due on the full price of each item.      remaining amount. Handle “two-for-
                                                   one” and similar coupons the same
•	 Do	not	charge	sales	tax	on	interest,	fi-        way.
   nancing and carrying charges on credit
   sales if they are separately stated on the
   customer’s bill.




                                                                    5
What’s taxable?
Summary of taxable                                 135, Fire Fighting, Police and Emergency       Tobacco products (except ciga-
                                                   Equipment; 139, Libraries; and 142, Sales      rettes),	including	cigars,	chewing	
sales in Minnesota                                 to Governments.                                tobacco,	pipe	tobacco,	etc.
Admission and amusement fees.                      Lodging (including lodging for less than       Utilities.	Electricity,	gas,	fuel	oils,	coal,	
Fees	to	access	health	clubs,	amusement	            30	days)	and	related	services.	Fact Sheet      wood,	water	and	telephone	services	are	
devices,	tanning	facilities,	spas,	athletic	       141, Hotels and Lodging Facilities.            taxable.	For	more	information,	request	
facilities,	golf	clubs,	ski	hills,	recreational	                                                  these fact sheets.
areas	(campgrounds,	parks,	trails,	picnic	         Machinery, equipment, tools, ac-
grounds),	movies,	etc.,	are	taxable.	One-          cessories, appliances, furniture and           116	Petroleum	Products	
time initiation fees and membership dues           fixtures,	either	new	or	used.	See	Capital      119	Telecommunication	Services
to athletic clubs are also taxed. Fact Sheet       equipment	in	the	“Claiming	a	refund”	          129	Utilities	Used	in	Production	
124, Exercise Facilities and Health Clubs.         section to determine if you qualify for a      145	Industrial	Production	
                                                   capital equipment refund.                      157	Residential	Utilities	
Aircraft. Fact Sheet 101, Aircraft.                Machinery, office equipment and                Also	available:	Rule 8130.1100, Utilities
Building materials, supplies and                   other items sold by businesses that            and Residential Heating Fuels.
equipment sold	to	owners,	contractors,	            used the items in their trade or business.
                                                                                                  Vending-machine sales	of	food,	candy,	
subcontractors	and	builders	to	build,	alter,	      Fact Sheet 132, Occasional Sales of Business
                                                                                                  gum,	pop	and	other	beverages,	taxable	
repair	or	improve	real	property.	Fact Sheet        Equipment and Goods.
                                                                                                  items,	and	receipts	from	game	machines	
128, Contractors.                                  Meals and drinks	prepared	by	the	seller,	      and jukeboxes. Fact Sheet 158, Vend-
                                                   including take-out orders and catering.        ing Machines and Other Coin-Operated
Cable and satellite TV service                     Fact Sheets 102D, Prepared Food; 118, Hos-     Devices.
including	basic,	premium,	pay-per-view,	           pital and Nursing Home Meals; and 137,
digital,	direct	satellite,	music	services	and	
other	similar	services.	Fact Sheet 119,
                                                   Restaurants and Bars.                          Special tax rates
Telecommunications Services.                       Motor vehicles. Leases and rentals of          Tax rates for some items are different
                                                   motor	vehicles	and	sales	of	vehicles that      from the general 6.5 percent rate.
Candy and soft drinks. Fact Sheets                 don’t require registration,	such	as	all-       Car rentals -- additional 6.2% tax and
102B, Candy; and 102C, Soft Drinks and             terrain	vehicles,	mini-bikes,	racing	bikes,	   3% fee. In addition to the 6.5 percent
Other Beverages.                                   etc.,	are	taxable.	(Also	see	Car rentals on    state	sales	tax	and	any	local	sales	tax,	this	
                                                   this page and motor vehicles in the “What’s    tax and fee applies to most rentals of
Computer software,	packaged	or	                    not taxable?” section.) Fact Sheet 171, Mo-
canned. Fact Sheet 134, Computer Soft-                                                            passenger	cars,	vans	or	pickup	trucks	for	
                                                   tor Vehicle Leases.                            fewer	than	29	days.	Fact Sheet 136, Motor
ware.
                                                   Prepaid telephone calling cards and            Vehicle 6.2% Rental Tax and 3% Fee.
Delivery charges (including shipping               recharging fees. Fact Sheet 119, Telecom-
and handling) for taxable items or ser-                                                           Liquor sales -- two taxes apply. The
                                                   munication Services.                           6.5%	general	sales	tax	rate	and	2.5%	
vices.	Fact Sheet 155, Delivery Charges.
                                                   Services.	The	following	services	are	tax-      liquor	gross	receipts	tax	applies	to	beer,	
Fabrication labor.	Charges	to	produce,	            able.	For	more	information,	request	these	     wine	and	other	alcoholic	beverages	sold	
fabricate,	print	or	process	items,	even	           fact sheets.                                   at an on-sale or off-sale municipal liquor
if the customer directly or indirectly                                                            store or other establishment licensed to
furnishes materials used. Fact Sheet 152,          112		Building	Cleaning	and	Maintenance						   sell any type of intoxicating liquor. (If the
Labor.                                                  (for commercial and residential           establishment	has	only	a	3.2	percent	malt	
                                                        buildings)                                liquor	license,	the	6.5	percent	tax	rate	
Installation labor for taxable items or
services.	Fact Sheet 152, Labor.                   113		Motor	Vehicle	Towing,	Washing,			         applies.) Fact Sheet 137, Restaurants and
                                                      	 Rustproofing	                             Bars.
Local governments. Sales to most local
governments	(including	counties,	cities,	          114		Detective	and	Security	Services	          Mobile homes and park trailers
towns,	commissions,	boards	and	special	            119		Telecommunication	Services                -- 4.225%. If you’re selling a new or used
taxing	districts)	are	taxable.	Some	schools,	                                                     mobile home for residential use and this
                                                   120		Laundry	and	Cleaning	Services	
hospitals,	nursing	homes,	libraries	and	                                                          is	the	first	time	it	is	being	sold	in	Minne-
                                                   121		Lawn	and	Garden	Care,	Tree	and		          sota,	or	if	you’re	selling	a	park	trailer,	the	
towns,	however,	can	make	exempt	pur-
                                                      	 Bush	Service,	Landscaping	                sale	is	subject	to	a	4.225	percent	tax	rate.	
chases (see Sales to local governments in
the “What’s not taxable?” section). Fact           122		Pet	Grooming,	Boarding,	and	Care		        For	mobile	homes,	the	4.225	percent	tax	
Sheets 111, Schools – Sales and Purchases;            	 Services	                                 applies to the dealer’s cost. Fact Sheet 150,
                                                   162		Massages	(not	medically	authorized)	      Manufactured Homes, Park Trailers and
                                                                                                  Prefabricated Homes.
                                                   166	 Parking	Services	

                                                                        6
What’s taxable? (continued)
Waste management                                Waste	management	services	for	both	           Commercial solid-waste management
                                                mixed municipal solid waste and non-          services and self-haulers -- 17%. Ap-
services                                        mixed municipal solid waste (construc-        plies to mixed municipal solid-waste man-
Waste	management	services	are	not	              tion	and	demolition	waste,	infectious	and	    agement	services	to	commercial	genera-
subject to sales tax but are subject to the     pathological	waste,	industrial	waste)	are	    tors	and	self-haulers,	including	amounts	
solid-waste management (SWM) tax.               subject to the SWM tax. Solid-waste man-      from	selling	bags	or	stickers	to	vendors	for	
These taxes are reported on your sales and      agement	services	include	waste	collection,	   resale to commercial generators.
use tax return. Download SWM Fact Sheet         transportation,	processing,	disposal,	and	
1, Solid-Waste Management Tax from our                                                        Construction and demolition waste
                                                compactor and container rental charges
website for more information.                                                                 and other non-mixed solid-waste
                                                when	made	by	the	waste	service	provider.	
                                                                                              services -- $.60 per noncompacted
You must register for waste manage-             Residential solid-waste management            cubic yard.
ment taxes so you will be able to report        services -- 9.75%. Applies to mixed
them on your sales tax return. A penalty        municipal solid-waste management ser-
of	10	percent	for	the	first	violation	and	20	   vices	to	residential	generators,	including	
percent	for	subsequent	violations	applies	      amounts from selling bags or stickers to
if the SWM tax is not reported on the ap-       vendors	for	resale	to	residential	genera-
propriate lines of the sales tax return.        tors.




                                                                     7
 What’s not taxable?
Items exempt by law                                the state instead of to the seller. Appli-    Airflight equipment. Airplanes and re-
When	an	item	is	exempt	by	law,	the	seller	         cants must be registered to collect sales     pair	parts	sold	to	airlines.	Rule	8130.6000.	
does	not	have	to	prove	why	tax	wasn’t	             tax	in	order	to	qualify.	Call	our	office	
                                                                                                 Agricultural production materials
charged other than showing the item was            for information on the requirements
                                                                                                 includes horticulture, floriculture, aquacul-
food,	clothing,	prescription	drugs,	etc.	          and how to apply.
                                                                                                 ture, silviculture, farming and maple-syrup
                                                •	 Motor	carrier	direct	pay.	Allows	motor	       harvesting. Fact Sheets 100, Agricultural
Items exempt with an                               carriers to pay tax directly to the state
                                                   when they lease mobile transportation
                                                                                                 Production; and 130, Aquaculture Produc-
                                                                                                 tion Equipment.
exemption certificate                              equipment or buy certain parts and ac-
When	a	purchaser	gives	a	seller	a	fully	           cessories. Applicants must be registered      Ambulances leased by an ambulance
completed	exemption	certificate	at	the	            for	sales	tax	in	order	to	apply.	To	apply,	   service	licensed	by	the	Emergency	Medical	
time	of	sale,	the	seller	does	not	have	to	         use	Form	MCDP-AP,	Motor Carrier               Service	(EMS)	Regulatory	Board.	Fact
collect	sales	tax.	Form	ST3,	Certificate of        Direct Pay Application.                       Sheet 135, Fire Fighting, Police, and Emer-
Exemption,	is	used	to	claim	exemption	                                                           gency Equipment.
                                                •	 Nonprofit	exemption.	Valid	only	
when buying taxable items. The purchaser                                                         Aquaculture equipment including repair
                                                   for	groups	organized	exclusively	for	
can	give	a	“single-purchase”	certificate	for	                                                    or replacement parts used to maintain or
                                                   charitable	purposes,	senior	citizen	
just	one	transaction	or	a	“blanket	certifi-                                                      repair qualifying equipment. Fact Sheet
                                                   groups,	and	religious	and	educational	
cate” that applies to future purchases of                                                        130, Aquaculture Production Equipment.
                                                   organizations.	To	apply,	use	Form	
qualifying exempt items.
                                                   ST16,	Application for Nonprofit Exempt        Bullet resistant body armour pur-
Exemption	certificates	do	not	expire	              Status-Sales Tax.                             chased	by	licensed	peace	officers,	and	state	
unless	the	information	on	the	certificate	      •	 Resource	recovery	facility	exemption.	        and local law enforcement agencies. Fact
changes;	however,	we	recommend	updat-              Allows	resource	recovery	facilities	          Sheet 135, Fighting, Police and Emergency
ing	exemption	certificates	every	three	to	         and their contractors to buy waste            Equipment.
four years.                                        processing	equipment	exempt.	Call	
                                                   our	office	for	information	on	the	            Caskets, urns for cremains and burial
If	you	want	to	develop	your	own	certifi-                                                         vaults. Fact Sheet 165, Funeral Homes,
cate	instead	of	using	Form	ST3,	you	must	          requirements and how to apply.
                                                                                                 Mortuaries, Crematories and Cemeteries;
include the following information:                                                               and Rule 8130.6300.
•	   purchaser’s name and address               Nontaxable items, uses
                                                                                                 Cigarettes. Tax on cigarettes is collected
•	   purchaser’s tax ID number and state
                                                and charges                                      at	the	distributor	level	rather	than	at	the	
                                                Most nontaxable items are listed here. An        retail	level.	
     of	issue,	or	FEIN,	or	driver’s	license	
                                                exemption	certificate	or	other	documenta-
     number                                                                                      Clothing and wearing apparel customarily
                                                tion	may	be	required.	If	you	have	a	ques-
•	   seller’s name and address                  tion	about	when	to	charge	tax,	contact	us.	      worn on the human body for general use.
                                                                                                 Fact Sheet 105, Clothing.
•	   type of business                           Admission tickets to regular-season
                                                games,	events	and	activities	for	public	         Labor	to	construct, repair or improve
•	   reason exemption is claimed                                                                 real property. Fact Sheet 128, Contractors.
                                                and	private	schools,	grades	1–12	and	to	
•	   purchaser’s signature and date             games,	events	and	activities	sponsored	by	       Court-reporter transcripts or copies of
                                                the	Minnesota	State	High	School	League;	         transcripts	of	verbatim	testimony	of	legal	
It is not acceptable for a customer to fur-
                                                admissions	to	artistic	events	sponsored	by	      proceedings	to	parties,	or	representatives	
nish	only	a	tax	ID	number;	the	customer	
                                                all	public	and	private	nonprofit	colleges	       of	parties,	involved	in	the	proceedings.	
must	furnish	all	of	the	above	information.	
                                                and	universities	in	Minnesota	if	the	event	
If	an	exemption	certificate	is	misused	         is held on the premises of the college or        Cross-country ski passes for the use
in	an	effort	to	evade	paying	sales	tax,	a	      university;	the	Minnesota	Zoo;	artistic	         of public trails. Fact sheet 123, Athletic
penalty	of	$100	for	each	transaction	may	       performances	sponsored	by	qualified	tax	         Facilities, Recreational Areas, Resorts and
apply.                                          exempt	organizations;	and	charitable	golf	       Campgrounds.
                                                tournaments	when	the	beneficiary	of	the	         Custom computer software. Fact Sheet
Applying for certain                            proceeds is a tax-exempt organization.
                                                Fact Sheet 111, Schools–Sales and Pur-
                                                                                                 134, Computer Software.
exemptions                                      chases.                                          Deliveries arranged by the seller to cus-
You must apply to the Department of                                                              tomers outside Minnesota. Fact Sheet 110,
Revenue	to	obtain	a	special	exemption	for	      Advertising materials shipped or trans-          Items for Use Outside Minnesota.
the following:                                  ferred outside the state by the seller or the
                                                customer and used solely outside Minne-
•	 Direct	pay.	Allows	the	buyer	to	pay	         sota. Fact Sheet 133, Advertising– Creative
   sales tax on certain items directly to       Promotional Services; and Rule 8130.9250.

                                                                      8
What’s not taxable? (continued)
Detachable tools. Separate detachable           on a separate form (not on your sales           Meals and drinks served	to	patients	
units that are used in producing a direct       tax	return).	Call	651-297-1772	for	more	        in hospitals and nursing homes as part
effect	upon	the	product	and	have	an	            information. Revenue Notice 01-04, Special      of	their	care.	Meals	and	lunches	served	
ordinary	useful	life	of	less	than	12	months.	   Fur Clothing Tax.                               at	pre-kindergarten	through	12th	grade	
Fact Sheet 145, Industrial Production; and                                                      schools are exempt. Meals and lunches
                                                Gasoline and other fuels on which Min-
Rule 8130.5500, subp. 9.                                                                        served	at	colleges,	universities	and	private	
                                                nesota gasoline excise tax has been paid
                                                                                                career	schools	are	taxable	as	of	July	1,	
Direct pay.	Certain	items	sold	to	persons	      and not refunded. Other exemptions also
                                                                                                2002,	unless	they	are	part	of	a	student’s	
who	give	you	an	exemption	certifi-              apply	(see	Petroleum	products	on	the	next	
                                                                                                board contract. Fact Sheets 111, Schools–
cate with their direct pay number. Rule         page). Fact Sheet 116, Petroleum Products.
                                                                                                Sales and Purchases; 118, Hospital and
8130.3400.
                                                Conversion	costs	to	make	vehicles	acces-        Nursing Home Meals; and 137, Restaurants
Discounts offered by the seller at the          sible to a disabled person. The exemp-          and Bars.
time of sale.                                   tion	covers	parts,	accessories	and	labor	
                                                                                                Medical equipment including durable
                                                to	make	a	vehicle	accessible	to	a	disabled	
Drugs and medicines. Most drugs and                                                             medical	equipment,	mobility	enhancing	
                                                person. Fact Sheet 125, Motor Vehicles.
medicines,	prescription	or	over-the-coun-                                                       equipment	and	prosthetic	devices.		Fact
ter. Fact Sheet 117A, Drugs, Grooming and       Certain	health products. Fact Sheets            Sheets 117B, Durable Medical Equipment;
Hygiene Products.                               117A, Drugs, Grooming and Hygiene Prod-         117C, Mobility Enhancing Equipment; and
                                                ucts; 117B, Durable Medical Equipment;          117D, Prosthetic Devices.
Electricity and natural gas used as
                                                117C, Mobility Enhancing Equipment;
the primary source of residential heat for                                                      Mill liners, grinding rods and grinding
                                                117D, Prosthetic Devices; 117E, Health
the	billing	months	of	November	through	                                                         balls sold to taconite companies. Fact
                                                Product Exemptions.
April. Fact Sheet 157, Residential Utilities.                                                   Sheet 147, Taconite and Iron Mining; and
                                                Horses and supplies for the care of             Rule 8130.9600.
Electricity used to make snow for
                                                horses,	including	feed	and	medications.	
outdoor	use	for	ski	hills,	ski	slopes	or	                                                       Used mobile homes used for residential
                                                Fact Sheet 144, Veterinary Practice.
ski trails. Fact Sheet 129, Utilities Used in                                                   purposes. Fact Sheet 150, Manufactured
Production.                                     Industrial production materials. Indus-         Homes, Park Trailers and Prefabricated
                                                trial	production	includes	manufacturing,	       Homes.
Farm machinery, including repair or
                                                mining,	printing,	photography,	lumbering	
replacement parts (except tires) used to                                                        Mobile transportation equipment,	
                                                and	commercial	fishing.	Fact Sheet 145,
maintain or repair qualifying equipment.                                                        accessories and parts sold to an interstate
                                                Industrial Production.
Fact Sheet 106, Farm Machinery.                                                                 motor	carrier	who	gives	you	a	motor	
                                                Installment payments	on	previously	             carrier direct-pay number. Fact Sheet 107,
Feminine hygiene products. Fact Sheet
                                                reported credit sales.                          Interstate Motor Carriers.
117A, Drugs, Grooming and Hygiene
Products.                                       Interest or finance charges incurred            Sales of motor vehicles that must be
                                                after the sale if listed separately on the      registered	and	have	a	license	plate	(such	as	
Automatic fire-safety sprinkler systems
                                                invoice.	                                       cars,	trucks,	trailers,	motorcycles,	mopeds	
and all component parts (including water-
                                                                                                and motor homes) are subject to sales
line expansions and additions) are exempt       Logging equipment and repair or
                                                                                                tax at the time of registration with the
when installed in an existing residential       replacement parts (except tires) used
                                                                                                Department	of	Public	Safety.	For	answers	
dwelling,	hotel,	motel,	or	lodging	house	       to maintain or repair the equipment. Fact
                                                                                                to questions about the sales tax on motor
with four or more dwelling units.               Sheet 108, Logging Equipment.
                                                                                                vehicles,	call	the	Department	of	Public	
Food. Groceries for human consumption.          Meals for children attending a child            Safety	at	651-296-6911.	Fact Sheet 125,
Candy,	soft	drinks	and	food	supplements	        care or early childhood education               Motor Vehicles.
are taxable. Fact Sheets 102A through 102E      program. Meals or drinks purchased for
                                                                                                Newspapers and publications regu-
(on food products); and 115, Food Stamps.       and	served	exclusively	to	children	who	
                                                                                                larly	issued	every	three	months	or	less.	
                                                are	less	than	14	years	of	age	or	disabled	
Fuel oil, coal, wood, steam, hot water,                                                         Over-the-counter	sales	of	magazines	and	
                                                children	who	are	less	than	16	years	of	age	
propane and LP gas used for residential                                                         periodicals are taxable.
                                                and who are attending a child care or early
heat on a year-round basis. Fact Sheet 157,
                                                childhood	education	program,	are	exempt	        Occasional sales of some business
Residential Utilities.
                                                if they are:                                    equipment. Fact Sheet 132, Occasional
Fundraising sales. Sales made by or for                                                         Sales of Business Equipment and Goods.
                                                •	 purchased	by	a	qualified	nonprofit	
nonprofit	organizations	may	qualify	for	
                                                   child	care	facility	that	primarily	serves	   Packing materials used to pack and
exemption if certain criteria are met.
                                                   families	with	income	of	250	percent	or	      ship household goods to destinations out-
Fur clothing is subject to a 6.5 percent           less	of	federal	poverty	guidelines;	and	     side Minnesota that will not be returned
gross-receipts tax and must be reported         •	 prepared	at	the	site	of	the	child	care	      to Minnesota except in the course of
                                                   facility.                                    interstate commerce.
                                                                       9
What’s not taxable? (continued)
Patent, trademark, and copyright                 Real property.	Sales	of	real	property,	            Special tooling,	i.e.,	tools,	dies,	jigs,	
drawings and documents. Some                     rentals	or	leases	of	real	property,	and	rent-      patterns,	gauges	and	other	tooling	that	
drawings,	diagrams,	or	similar	or	related	       als of mobile homes used for residential           has	value	and	use	only	for	the	buyer	and	
documents,	or	copies	of	these	documents	         purposes	for	more	than	30	days.	                   only for the use for which it was made. An
produced and sold by a patent drafter are                                                           item	has	value	only	to	the	buyer	if	it	is	not	
exempt.                                          Repair labor (except clothing repair) if
                                                                                                    standard enough to be stocked or ordered
                                                 listed	separately	on	the	invoice.	Fact Sheet
Personal computers and related                                                                      from a catalog or other sales literature
                                                 152, Labor.
software if	specifically	required	for	use	                                                          but must be produced according to the
in	a	public	or	private	school,	college,	         Resale.	Goods	and	services	purchased	              buyer’s	special	requirements,	and	is	not	
university,	or	business	or	trade	school	for	     solely	to	resell,	lease	or	rent	in	the	regular	    commonly used by someone else whose
regularly	enrolled	students.	To	qualify,	the	    course of business.                                conditions for use are reasonably similar
                                                                                                    to the buyer’s. Fact Sheet 145, Industrial
computers or software must be sold by the        Sacramental wine used in religious
institution.                                                                                        Production.
                                                 ceremonies	if	sold	by	a	nonprofit	religious	
Petroleum products.	Petroleum	prod-              organization or by someone with a sacra-           Telecommunications equipment used
ucts are exempt under certain conditions:        mental wine license.                               directly	by	a	telecommunications	service	
                                                                                                    provider	primarily	to	provide	telecom-
•	 Gasoline,	motor	fuel,	natural	gas	and	        Service materials.	Materials,	utilities,	
                                                                                                    munications	services	for	sale	at	retail.	Fact
   propane on which Minnesota gaso-              and	short-lived	detachable	tools	used	or	
                                                                                                    Sheet 119, Telecommunication Services.
   line excise tax has been paid and not         consumed	in	providing	the	following	tax-
   refunded.                                     able	services	are	exempt:	                         Textbooks that are required for classes
                                                 •	 Laundry	and	dry	cleaning	(Fact	Sheet	           in	public	or	private	schools,	colleges,	
•	 Fuels	used	or	consumed	in	agricultural	          120)	                                           universities,	or	business	and	trade	schools	
   or industrial production.                                                                        when sold to regularly enrolled students.
                                                 •	 Car	washing	and	towing	(Fact	Sheet	
•	 Fuels	for	use	in	ambulances,	munici-             113)	                                           Rule 8130.6700.
   pal	fire	apparatus	and	marked	police	
                                                 •	 Building	cleaning	and	maintenance	              Trade-in allowances can be subtracted
   vehicles.	
                                                    (Fact	Sheet	112)	                               before	figuring	the	tax	if	the	items	traded	
•	 Petroleum	products	used	to	improve	                                                              in are also taxable and sold by the retailer
   agricultural	land	by	constructing,	           •	 Detective	and	security	services	(Fact	
                                                    Sheet	114)	                                     in the regular course of business.
   maintaining and repairing drainage
   ditches,	tile	drainage	systems,	grass	        •	 Pet	grooming	and	animal	boarding	               TV commercials. TV commercials and
   waterways,	water	impoundment	and	                (Fact	Sheet	122)	                               items primarily used or consumed in pre-
   other erosion-control structures.             •	 Lawn	care	(Fact	Sheet	121)	                     production,	production	or	post-produc-
                                                                                                    tion of a TV commercial are exempt. Fact
•	 Petroleum	products	used	in	a	pas-             •	 Massages	(Fact	Sheet	162)                       Sheet 163, TV Commercials.
   senger snowmobile for off-highway
   business use to operate a resort.             Ship repair and replacement parts                  Waste-management containers and
                                                 and	lubricants	used	by	ships	or	vessels	           compactors purchased by a waste
•	 Used	motor	oil.	                              engaged principally in interstate or foreign       management	service	provider	to	use	in	
Fact Sheet 116, Petroleum Products.              commerce.                                          providing	waste-management	services	are	
Prizes for games of skill or chance con-         Ski areas. Tangible personal property              exempt.	To	qualify,	the	service	provider	
ducted	at	events	such	as	carnivals,	festivals	   used or consumed primarily and directly            must collect the solid-waste management
and fairs lasting fewer than six days are ex-    for tramways at ski areas or in snowmak-           tax on customer charges or on the lease
empt.	Prizes	for	use	at	amusement	parks,	        ing and snow grooming operations at ski            or rental payments for the compactors
arcades,	the	State	Fair	and	other	events	        hills,	ski	slopes	or	ski	trails	are	exempt.	See	   or	containers.	Containers	for	recycling	
that	last	six	days	or	more,	and	for	lawful	      2000	Sales	and	Use	Tax	Law	Changes	for	            remain taxable.
gambling or the state lottery are taxable.       details.                                           Water	utility	services	for	residential	use.	
Public safety radio communication                Solar energy systems. Solar energy                 Also exempt is unsweetened bottled water
system. The exemption for purchases of           systems are exempt. “Solar energy system”          in any size container. Fact Sheet 102C, Soft
goods	and	services	used	to	construct,	op-        means	a	set	of	devices	whose	primary	              Drinks and Other Beverages.
erate,	maintain	and	enhance	the	backbone	        purpose is to collect solar energy and             Wind energy conversion systems and
system of the region-wide public safety          convert	and	store	it	for	useful	purposes	          materials	used	to	manufacture,	install,	
communication system.                            including heating and cooling buildings            construct,	repair	or	replace	them.	
                                                 or	other	energy	using	processes,	or	to	
                                                 produce generated power by means of any
                                                 combination	of	collecting,	transferring,	or	
                                                 converting	solar-generated	energy.	

                                                                       10
What’s not taxable? (continued)
YMCA, YWCA and Jewish Community                Federal government. All sales to the           •	 Solid-waste disposal facility ma-
Centers of Greater Minneapolis and             federal	government	and	its	agencies	are	          chinery and equipment.
St.	Paul	memberships,	both	one-time	           exempt.	The	purchaser	must	provide	a	          •	 Transit program	vehicles	that	meet	
initiation fees and periodic membership        purchase	order,	payment	voucher	or	work	          certain criteria.
dues. Separate charges for the use of an       order.	Form	ST3	may	also	be	used.	Pur-
association’s sports and athletic facilities   chases	by	federal	employees	are	taxable,	      Fact Sheets 111, Schools – Sales and
are taxable.                                   even	if	they	are	reimbursed	by	the	federal	    Purchases; 135, Fire Fighting, Police, and
                                               government.	                                   Emergency Equipment; 139, Libraries; and
                                                                                              142, Sales to Governments.
Sales to certain                               Sales to local governments,	including	
                                                                                              Non-Minnesota government agencies.
people and nonprofit                           counties,	cities,	townships,	commissions,	
                                                                                              Sales to another state or another state’s
                                               boards,	special	taxing	districts,	etc.,	are	
organizations                                  taxable,	except	those	briefly	described	       political	subdivisions	are	not	taxable	if	
The following organizations are allowed        below.	The	local	government	must	give	         the sales would not be taxed in that other
to purchase most items exempt from sales       sellers	a	purchase	order,	payment	voucher,	    state. This exemption does not apply to
tax.	To	claim	exemption,	they	must	give	an	    work	order	or	Form	ST3	to	purchase	the	        sales of meals and lodging.
exemption	certificate	to	the	seller.	          following exempt from tax.                     Resource recovery facilities must
Charitable organizations must apply            •	 Leases	of	vehicles	used	as	ambulances       apply	for	and	receive	approval	from	the	
to	the	Department	of	Revenue	for	an	               by	ambulance	services	licensed	by	the	     Department	of	Revenue.	Form	ST3	must	
exempt-status	number	(ES#)	and	furnish	            EMS Regulatory Board.                      be	given	to	the	seller	including	the	certifi-
that	number	on	Form	ST3.	                      •	 Biosolids processing equipment              cate	number	(CN#)	issued	in	the	approval	
Consular officials. Sales tax exemption            and materials incidental to installation   letter.
cards are issued to some foreign diplomats         for wastewater treatment facilities.
                                                                                              Senior citizen groups formally orga-
and	consular	officials	stationed	in	this	      •	 Bullet-resistant body armor.                nized	for	pleasure,	recreation	and	other	
country. The card will list any limitations    •	 Chore and homemaking services               nonprofit	purposes	must	apply	to	the	De-
on	the	exemption.	For	example,	some	of-            for the elderly and disabled that are      partment	of	Revenue	for	an	exempt	status	
ficials	must	pay	tax	on	hotel	room	charges	        purchased	by	a	local	government	           number	(ES#)	and	provide	the	number	on	
or on purchases under a certain amount.            specifically	for	elderly	and	disabled	     Form	ST3.	
If someone shows you a sales tax exemp-            individuals.	
                                                                                              The State of Minnesota uses a direct
tion	card,	check	the	card	to	make	sure	        •	 Correctional facility meals for             pay	number,	which	means	that	Minnesota	
the	purchase	qualifies	for	the	exemption.	         inmates.                                   state agencies do not pay tax to sellers on
You may also ask for additional identi-        •	 Emergency rescue vehicle repair             purchases of tangible items. A Minnesota
fication.	If	the	purchase	qualifies,	write	        and replacement parts.                     state purchase order is enough to docu-
the	individual’s	tax	exemption	number	                                                        ment	the	exemption,	or	an	exemption	cer-
                                               •	 Firefighter personal protective
on	your	billing	or	sales	invoice.	Keep	the	                                                   tificate	may	be	used	including	the	direct	
                                                   equipment.
invoice	in	your	files.	                                                                       pay	number.	Note:	Charge	tax	on	sales	of	
                                               •	 Fuels	used	in	ambulances,	fire	appara-      services,	meals	and	lodging,	admissions,	
Educational and religious organiza-                tus	and	marked	police	vehicles.	
tions	must	give	the	seller	an	exemption	                                                      and	motor	vehicles	to	Minnesota	state	
                                               •	 Gravel, machinery, equipment and            agencies since the direct pay number does
certificate.	If	they’ve	received	an	exempt	
                                                   motor vehicles (except pickup trucks)      not apply to these items.
status	number	(ES#)	from	the	Department	
                                                   used	exclusively	for	road	and	bridge	
of	Revenue,	that	number	should	be	writ-                                                       Tribal governments. All sales to Indian
                                                   maintenance if purchased by a town.
ten	on	Form	ST3.	                                                                             tribal	governments	are	exempt.		See Fact
                                               •	 Purchases	by	hospitals and nursing          Sheet 160, Indians.
                                                   homes owned and operated by local
                                                   governments.	                              Veteran groups can make purchases for
                                                                                              charitable,	civic,	educational	or	nonprofit	
                                               •	 Purchases	by	public	and	legislative	
                                                                                              purposes	by	giving	the	seller	a	fully	com-
                                                   libraries.
                                                                                              pleted	Form	ST3.		
                                               •	 Metropolitan Council.	MTC	buses,	
                                                   light	rail	transit	vehicles	and	repair	
                                                   parts
                                               •	 Purchases	by	school districts and
                                                   public schools.




                                                                   11
Fact sheets
Fact sheets are available on many top-        Farm	Machinery,	#106		                     Occasional Sales of Business Equipment
ics related to sales and use taxes. You can   Financial	Institutions,	#138		             	 and	Goods,	#132		
download them from our website at www.        Fire	Fighting,	Police,	and	Emergency			
taxes.state.mn.us or contact our office to    	 Equipment,	#135		                        Parking	Services,	#166		
have them mailed to you.                      Food	and	Food	Ingredients,	#102A		         Pet	Grooming,	Boarding,	and	Care		 	
                                              Food	Stamps,	#115		                        	 Services,	#122		
                                              Funeral	Homes,	Mortuaries,	Crematories		   Petroleum	Products,	#116		
 A Step-by-Step Guide to Filing
                                              	 and	Cemeteries,	#165                     Photography	and	Video	Production,	#169		
	 and	Paying	Sales	and	Use	Tax		    	
                                                                                         Prepared	Food,	#102D		
	 Electronically,	#170		
                                              Health	Care	Facilities,	#172		             Printing	Industry,	#109		
Advertising		Creative	Promotional		 	
                                              Health	Product	Exemptions,	#117E		         Prosthetic	Devices,	#117D		
	 Services,	#133		
                                              Hospital	and	Nursing	Home	Meals,	#118		
Agricultural	Production,	#100		
                                              Hotels	and	Lodging	Facilities,	#141		      Recreational	Areas,	Resorts,	&	Camp	 	
Aircraft,	#101		
                                                                                         	 grounds,	#123		
Aquaculture	Production	Equipment,			
                                              Indians,	#160		                            Residential	Utilities,	#157		
	 #130		
                                              Industrial	Production,	#145		              Restaurants	and	Bars,	#137		
Arts	and	Crafts,	#154		
                                              Interstate	Motor	Carriers,	#107		
Automotive	Repairs	and	Service,	#131		
                                              Items	for	Use	Outside	Minnesota,	#110		    Sales	to	Governments,	#142		
                                                                                         Schools	-	Sales	and	Purchases,	#111		
Building	Cleaning	and	Maintenance,			
                                              Labor,	#152		                              Selling	Event	Exhibitors	and	Operators,		
	 #112		
                                              Laundry	and	Cleaning	Services,	#120		      	 #148		
                                              Lawn	and	Garden	Care,	Tree	and	Bush		      Soft	Drinks	and	Other	Beverages,	#102C		
Candy,	#102B		
                                              	 Service,	#121		                          Special	Local	Taxes;	Minneapolis,		 	
Capital	Equipment,	#103		
                                              Libraries,	#139		                                                                       	
                                                                                         					Rochester	and	St.	Cloud,	St.	Paul,	#164S	
Chiropractors,	#151		
                                              Local	Sales	and	Use	Taxes,	#164		
Clothing,	#105		
                                              Loggers	and	Log	Home	Builders,	#153		      Taconite	and	Iron	Mining,	#147		
Computer	Software,	#134				
                                              Logging	Equipment,	#108		                  Telecommunications	Services,	#119		
Contractors,	#128		
                                                                                         TV	Commercials,	#163		
Coupons,	Discounts	and	Other	Forms	of		
                                              Manufactured	Homes,	Park	Trailers	and		
	 Payment,	#167		
                                              	 Prefabricated	Homes,	#150		              Use	Tax	for	Businesses,	#146		
                                              Massages,	#162		                           Use	Tax	for	Individuals,	#156		
Delivery	Charges,	#155		
                                              Meat	Processors,	#126		                    Utilities	Used	in	Production,	#129		
Detective	and	Security	Services,	#114		
                                              Minnesota	State	Fair	-	Sales	Tax,	#140		
Dietary	Supplements,	#102E
                                              Mobility	Enhancing	Equipment,	#117C		      Vending	Machines	and	Other	Coin		 	
Direct	Selling	Companies,	#168		
                                              Motor	Vehicle	6.2%	Rental	Tax	and	3%		     	 Operated	Devices,	#158		
Drugs,	Grooming	and	Hygiene	Products,		
                                              	 Fee,	#136		                              Veterinary	Practice,	#144		
	 #117A		
                                              Motor	Vehicle	Leases,	#171		
Durable	Medical	Equipment,	#117B		
                                              Motor	Vehicle	Towing,	Washing,	Rust		      Also	available:		JOBZ	Tax	Exemptions			
                                              	 proofing,	#113		                            Minnesota Job Opportunity Building
Exercise	Facilities	and	Health	Clubs,		 	
                                              Motor	Vehicles,	#125		                     	 Zones
	 #124		




                                                                 12
General filing information
Your sales and use tax account is set up         Record-keeping                                    Penalties and interest
on	either	a	monthly,	quarterly	or	annual	        It’s important to keep good records so            You will be charged penalties and interest
filing	basis	depending	on	how	much	tax	          you—and	the	department—figure	the	                if	you	don’t	file	or	pay	what	you	owe	on	
you owe each month.                              correct amount of state and local tax you         time.	Shortage	of	available	cash	is	not	a	
•	 Annual filing.	Tax	must	average	less	         owe. Your records should include:                 valid	reason	for	not	filing	a	return	and	
   than	$100	per	month.	                                                                           paying the tax because sales tax is not an
                                                 •	 bills,	receipts,	invoices,	cash-register	
                                                                                                   out-of-pocket expense to the retailer. Sales
•	 Quarterly	filing.	Tax	must	average	less	         tapes and any other original docu-
                                                                                                   tax collected by a retailer must be held
   than	$500	per	month.	                            ments that support the entries in your
                                                                                                   in trust for the state until remitted on
•	 Monthly	filing.	Tax	averages	more	               account	books;	
                                                                                                   or before the appropriate due date. This
   than	$500	per	month.	                         •	 exemption	certificates;	and	                   money does not belong to the retailer and
•	 Seasonal	filing.	If	your	business	is	         •	 worksheets	used	to	prepare	your	tax	           should not be used for any other business
   not	open	year-round,	request	seasonal	           returns.                                       purpose.
   filing.	With	seasonal	status,	you’ll	only	
                                                 Your records should show both sales (tax-         We’ll	send	you	a	notice	if	we	don’t	receive	
   need	to	file	returns	for	those	periods	
                                                 able	and	nontaxable)	and	purchases,	the	          your	return	or	payment.	If	you	have	ques-
   your business is open.
                                                 rate of tax collected on each sale and any        tions	or	believe	we’ve	made	an	error,	call	
•	 One-time	filing.	If	you	plan	to	make	         use tax you paid.                                 us immediately. We’ll work with you to
   taxable sales in Minnesota at only one                                                          get your account current. If you disagree
   event	or	during	one	month,	ask	for	
   one-time	filing.	Do	not	apply	for	one-        Accounting methods                                with	the	outcome,	refer	to	the	notice	you	
                                                                                                   receive	for	information	on	your	right	to	
   time	filing	if	you	plan	to	make	taxable	      Use the same accounting method for sales
                                                                                                   appeal.
   sales in the future.                          tax as you use for income tax. If you use
                                                 the	cash	method,	include	only	payments	           Failure to pay. If you don’t pay the tax
If the amount of tax you report is con-          received	in	the	period	of	the	return.	For	        on	time,	the	following	penalties	apply:	
sistently	higher	or	lower	than	the	limits,	      an	accrual	method,	include	all	cash	sales,	
you	can	change	your	filing	cycle	when	you	                                                         •		 5	percent	of	the	tax	due	if	the	payment	
                                                 credit	sales,	installment	sales	and	COD	
log	into	e-FILE	Minnesota	to	file	or	pay		                                                             is	one	to	30	days	late;	
                                                 sales made during the period of the
taxes.	Click	on		“Update	business	info”	on	      return.                                           •		 10	percent	if	it	is	31	to	60	days	late;	
the	Main	Menu	page,	then	click	on	the	                                                             •		 15	percent	if	it	is	more	than	60	days	
“Sales and Use tax” link in the left side-       If you want to change accounting meth-
                                                 ods,	send	us	a	letter	explaining	when	and	            late.
bar.	If	you	don’t	have	Internet	access,	call	
our	office	to	have	your	account	changed	         why	you	want	to	change,	and	showing	              Failure to file a return. Add an ad-
to	another	filing	basis.	                        that the new method will not make audit-          ditional	5	percent	to	the	above	penalty	if	
                                                 ing	your	records	more	difficult.	You	can-         you	also	don’t	file	your	return	on	time.	
                                                 not	change	your	filing	method	until	you	          Even	if	your	tax	is	paid	timely,	you	must	
Due dates                                        receive	our	written	approval.	                    still	file	a	return	electronically,	either	over	
You	will	not	receive	a	notice	to	remind	                                                           the Internet or by phone. A penalty will
you	to	file	your	return,	so	it’s	important	to	
know the due dates listed below.                 Statute of limitations                            be	imposed	for	failure	to	file	a	tax	return	
                                                 We can audit your return within three             within	30	days	after	written	demand	for	
Monthly	filers.	20th	day	of	the	following	       and	a	half	years	after	you	file	it.	If	there’s	   filing	the	return	is	given	to	the	taxpayer.	
month.                                           an	error	in	the	amount	of	tax,	and	the	dif-       The	penalty	is	five	percent	of	the	tax	not	
                                                 ference between the original amount and           paid	prior	to	the	written	demand	or	$100,	
Quarterly filers.	April	20,	July	20,	October	                                                      whichever	amount	is	greater.	
20	and	January	20.	                              the	correct	amount	is	25	percent	or	more,	
                                                 we	have	six	and	a	half	years	to	audit	the	        For those required to pay electronical-
Annual	filers.	February	5	of	the	following	      return.	There	is	no	time	limit	if	we	find	        ly.	For	mandatory	and	associated	payers,	
year.	Annual	filers	must	file	on	a	calendar-     you’ve	fraudulently	reported	tax	informa-         an additional 5 percent penalty applies to
year	basis,	not	a	fiscal	or	other	basis.	        tion	or	have	not	filed	a	return.	                 payments not made electronically. (Refer
Unregistered individuals filing annual                                                             to section Electronic payment required in
use tax.	April	15	of	the	following	year.	                                                          the “Filing electronically” section)
When	the	due	date	falls	on	a	Saturday,	
Sunday	or	legal	holiday,	the	due	date	
becomes the next business day. If you mail
your	payment,	it	must	be	postmarked	by	
the due date.



                                                                       13
General filing information (continued)
Repeated failure to pay. There is an              Your rights as a taxpayer                       Why we ask for information. Your
additional	penalty	of	25	percent	of	the	          As	a	Minnesota	taxpayer,	you	have	the	          name,	address,	and	Minnesota	tax	ID	
unpaid tax if you continually pay your tax        right to clearly understand your rights         number	are	required	for	identification.		
late.                                             and	responsibilities	under	the	law,	and	        Your taxable sales and use tax purchases
Local taxes. If you don’t report lo-              the	Department	of	Revenue	is	responsible	       are required to determine your correct tax.
cal sales tax on the appropriate line of          for	helping	you	do	so.	Several	brochures	       If	you	don’t	provide	this	information,	your	
your	sales	tax	return,	the	penalty	is	five	       are	available	on	our	website	or	by	calling	     return may not be accepted or processing
percent of the amount of tax not properly         our	office.	We	also	want	you	to	know	how	       of the return may be delayed. You may also
reported on the return.                           your	information	is	used,	and	what	is	con-      be	subject	to	civil	and	criminal	penalties	
                                                  sidered	public	and	private	information.         for	not	filing	a	return.	
Consolidated returns.	Location	infor-
mation	must	be	provided	for	consolidated	                                                         The information on your return may be
                                                  Public vs. private information
sales	and	use	tax	returns.		A	$500	penalty	                                                       compared with other information you
                                                  Public	information	about	businesses	regis-
applies for each return not containing                                                            have	provided	to	the	Department	of	
                                                  tered for sales and use tax includes:
location	information.	The	privilege	to	file	                                                      Revenue.	
a	consolidated	return	may	be	revoked	and	         •	 Minnesota	tax	ID	number,
you	may	be	required	to	register	and	file	         •	 name	and	address	under	which	the	
separately for each location.                        business	is	registered,
Interest	is	figured	on	the	total	tax	plus	        •	 business	name	and	location,
penalty at the following rates from the           •	 registration	date,	and
date	you	should	have	paid	the	tax	until	the	
                                                  •	 any	registration	cancellations.
date the total is paid:
                                                  If	someone	asks	for	specific	information	
2007–8%,	2006–6%,	2005–4%,	2004–4%,	
                                                  about	your	business,	only	the	above	in-
2003–5%,	2002–7%	
                                                  formation	will	be	provided	(MS 270B.08,
The same interest rates apply to refunds.         subd. 1).
The	law	allows	various	ways	for	us	to	col-        Private	information	includes	the	infor-
lect unpaid taxes including cancelling your       mation	you	provide	on	your	tax	return,	
authorization	to	make	sales	in	Minnesota,	        except for the public information listed
which prohibits you from doing business           above.	Private	information	cannot	be	
in the state. It’s a felony to continue to        given	to	others	without	your	consent	ex-
make taxable sales after your authoriza-          cept	to	the	IRS,	other	states	that	guarantee	
tion	is	revoked.	There	is	also	a	civil	penalty	   the	same	privacy	and	certain	government	
of	$100	for	each	day	you	continue	to	make	        units	as	provided	by	law.		
taxable sales after authorization has been
revoked.	




                                                                      14
Preparing to file your return
Before you start                              Example: All prices at your restaurant            Use tax purchases (6.5%)
You may need to make adjustments to           include Minnesota sales tax only. The             Report the purchase price of taxable items
your	figures	before	you	file	your	return.	    total taxable sales at the end of the month       bought for business or personal use that
                                              are	$10,000.	Divide	$10,000	by	1.065	(or	         were not taxed when you bought them.
If the following items apply to sales in      multiply	by	.939)	to	remove	the	Minneso-          Include only amounts subject to the full
the	current	period,	subtract	them	from	       ta	tax	($10,000	÷	1.065=	$9,390).	Report	         6.5 percent tax rate. Fact Sheet 146, Use
the	appropriate	tax	type	before	you	file.	    $9,390	on	the	General	rate	sales	line.            Tax for Businesses.
(To	make	changes	to	a	prior	period,	file	
an amended return. See the “Amending a
return” section.)
                                              Sales tax types                                   Variable rate purchases
                                              When	you	file	electronically,	you	will	be	        If you bought items in another state
•	 Bad	debts	on	sales	previously	reported	    asked	to	enter	figures	for	only	the	tax	          and paid sales tax at a rate lower than
   if you write them off for federal in-      types for which you are registered.               Minnesota’s	rate,	you	owe	the	difference	
   come tax purposes.                                                                           between the Minnesota rate and the rate
                                              If	you	file	over	the	Internet,	you	can	add	       paid to the other state. You must enter the
•	 Cash	or	credit	refunds	given	to	cus-       additional tax types to your return by
   tomers.                                                                                      purchase price of the items and the differ-
                                              clicking “Add a sales tax type”.                  ence in the tax amount.
•	 Checks	that	are	returned	for	
                                              If	filing	by	phone,	you	must	register	for	        Example: If you bought a computer
   nonsufficient	funds	if	you	are	on	the	
                                              any	additional	tax	types	before	you	file.	        in	another	state	for	$3,000	and	paid	4	
   cash method of accounting.
                                              Call	651-282-5225.	                               percent	tax,	you	owe	2.5	percent	use	tax	
Be sure to adjust the correct tax type.                                                         (6.5%	-	4%	=	2.5%)	to	Minnesota.	Enter	
                                              Following are all the tax types that can be
For	example,	if	a	customer	returns	an	                                                          $3,000	for	the	variable-rate	purchases	tax-
                                              reported on the sales and use tax return.
item that was subject to Minnesota sales                                                        able	amount	and	$75	for	the	tax	amount	
tax	and	Minneapolis	local	tax,	be	sure	to	
adjust both state and Minneapolis sales       Gross receipts                                    ($3,000	x	2.5%	=	$75).	Fact Sheet 146, Use
                                              Report total receipts or sales from all           Tax for Businesses.
tax types.
                                              business operations for Minnesota during
                                              the reporting period (what you report             Local city and county taxes
Subtracting sales tax                         as Minnesota receipts for income tax).            The local taxes that you are registered for
from receipts                                 Include	all	taxable	and	exempt	sales,	leases	     will show on your sales and use tax return.
If	your	total	receipts	include	sales	tax,	    and rentals. Do not include sales tax. You        Report	all	taxable	sales,	leases,	rentals	
you must subtract the tax from the total      must always enter an amount for gross             and	services	subject	to	local	tax	on	the	
receipts	before	filing	your	return.	          receipts.	If	you	don’t	have	gross	receipts	to	    appropriate line. For a current list and
                                              report,	enter	zero.	                              information	about	local	taxes,	see	Fact
If	receipts	include		 Divide		    Multiply	                                                     Sheet 164, Local Sales and Use Taxes. For
tax at rate:       receipts by: OR by:
                                              General rate sales (6.5%)                         information about the special local taxes
6.50%	             1.0650	         0.939      Report	all	taxable	sales,	including	liquor	       that	apply	to	restaurants,	liquor,	lodging,	
6.65%	             1.0665	         0.938      sales,	leases,	rentals	and	services	subject	to	   and	entertainment,	see	Fact Sheet 164S,
7.00%	             1.0700	         0.935      the 6.5 percent tax rate.                         Special Local Taxes; Minneapolis, Rochester
7.15%	             1.0715	         0.933                                                        and St. Cloud, St. Paul.
                                              Be sure to include sales subject to local tax
7.50%	             1.0750	         0.930
                                              here and on the appropriate local tax line.
8.00%	             1.0800	         0.926
9.00%	             1.0900	         0.917
9.15%	             1.0915	         0.916
9.50%	             1.0950	         0.913
9.65%	             1.0965	         0.912
10.00%	            1.1000	         0.909
10.15%	            1.1015	         0.908
12.00%	            1.1200	         0.893
12.50%	            1.1250	         0.889
12.65%	            1.1265	         0.888
13.00%	            1.1300	         0.885
13.15%	            1.1315	         0.884
15.50%	            1.1550	         0.866
15.65%	            1.1565	         0.865




                                                                   15
Preparing to file your return (continued)
Liquor sales (2.5%)                             Mobile homes and park trailers                   Residential solid-waste
Two	taxes	apply	-	the	6.5%	general	sales	       (4.225%)                                         management services (9.75%)
and	use	tax	rate	and	2.5%	liquor	gross-         Report the sale of a mobile home if it is        Report mixed municipal solid-waste man-
receipts	tax.	These	taxes	apply	to	beer,	       the	first	time	it	is	registered	in	Minnesota	    agement	services	to	residential	generators,	
wine	and	other	alcoholic	beverages	sold	at	     and if it will be used for residential pur-      including amounts from selling bags or
businesses licensed to sell any type of in-     poses.	For	mobile	homes,	enter	the	deal-         stickers	to	vendors	for	resale	to	residential	
toxicating liquor. In addition to reporting     er’s cost of the mobile home. For new and        generators.
liquor	sales	on	the	General	rate	line,	you	     used	park	trailers,	report	the	selling	price.	
must also report liquor sales on the Gross      Fact Sheet 150, Manufactured Homes, Park         Commercial solid-waste
receipts	liquor	line	and	local	tax	line,	if	    Trailers and Prefabricated Homes.                management services (17%)
applicable.                                                                                      Report mixed municipal solid-waste man-
Note:	If	the	establishment	has	only	a	3.2	      Car rental (6.2%)                                agement	services	to	commercial	genera-
percent	malt	liquor	license,	only	the	6.5	      Report leases or rentals of passenger auto-      tors	and	self-haulers,	including	amounts	
percent tax rate and any local tax applies.     mobiles,	vans	or	pickup	trucks	for	periods	      from	selling	bags	or	stickers	to	vendors	for	
                                                of	fewer	than	29	days.	Also	include	these	       resale to commercial generators.
Motor carrier direct pay                        sales on the General rate sales line. Fact
If	you	have	a	Motor	Carrier	Direct	Pay	         Sheet 136, Motor Vehicle 6.2% Rental Tax         Construction and demolition
Certificate	(MCDP),	add	all	purchases	of	       and 3% Fee.                                      waste and other non-mixed
qualifying	repair	parts	and	accessories,	                                                        solid-waste services ($.60 per
and leases of mobile transportation equip-      Car rental fee (3%)                              noncompacted cubic yard)
ment. Enter this amount as the taxable          This fee is intended to reimburse lessors        List	the	total	number	of	noncompacted	
amount	for	MCDP	purchases.	Multiply	            for	the	cost	of	registering	vehicles	and	        cubic yards of waste.
this	figure	by	your	Minnesota	prorate	          is only reported once per year on the
mileage	percentage,	and	then	multiply	the	      December return.                                 See SWM Fact Sheet 1, Solid-Waste Man-
result by the 6.5 percent tax rate. Enter the                                                    agement Tax, for information about the
                                                Add	the	total	amount	of	3	percent	fees	          above three taxes.
result as the tax amount.                       collected during the calendar year and
Example:	You	paid	$4,000	for	repair	parts.	     enter	it	when	prompted.	To	figure	the	
Your Minnesota prorate mileage percent-         amount	of	tax,	subtract	the	actual	regis-
age	is	5	percent.	($4,000	×	5%	=	$200.	         tration	tax	you	paid	on	the	vehicles	from	
$200	×	6.5%	=	$13.)	You	would	enter	            the total amount collected and enter the
$4,000	as	the	taxable	amount	and	$13	as	        difference.	If	the	amount	is	less	than	zero,	
the tax amount. Fact Sheet 107, Interstate      enter zero. Fact Sheet 136, Motor Vehicle
Motor Carriers.                                 6.2% Rental Tax and 3% Fee.




                                                                     16
Filing electronically
                          You	can	both	file	    Note for first-time users:	If	you	have	         Fed Wire. Fed Wire payments are
                          and pay using         never	used	e-File Minnesota	to	file	or	pay	     initiated	by	you	through	your	financial	
                          e-File Minnesota      taxes,	you	will	need	a	temporary	password	      institution.	Most	financial	institutions	
                          over	the	Inter-       to	access	the	system	the	first	time.	Your	      are able to include information needed
                          net. If you don’t     six-digit temporary password is included        to post a Fed Wire payment (Minnesota
have	Internet	access,	a	telephone	option	is	    on	the	confirmation	letter	you	received	        tax	ID	number,	tax-type	code,	period	of	
available.	Use e-File Minnesota to:             after you registered for a Minnesota tax        payment).	If	your	financial	institution	
                                                ID	number.	If	you	don’t	have	a	temporary	       is	unable	to	include	the	payment	details,	
•	 File	current	and	past	due	returns            password,	contact	Business	Registration	        you should enter the details by submit-
•	 Pay	current	and	past	due	returns             at	651-252-5225	or	Sales	Tax	at	651-296-        ting	a	Fed	Wire	notification	through	the	
•	 File	amended	returns                         6181.                                           e-File	Minnesota	system.	If	you	don’t	have	
                                                                                                Internet	access,	call	our	office	for	more	
File early—pay later. Using e-File              Multiple users. More than one user can
                                                                                                information.
Minnesota,	you	can	file	your	return	early	      be	set	up	to	file	and	pay	a	business’s	taxes	
but schedule the electronic withdrawal          through e-File Minnesota on the Inter-          By paper check.	If	you	pay	by	check,	
of your payment for the due date. Other         net. One person acts as the “password           you	must	complete	the	payment	voucher	
methods of payment are explained be-            administrator” and is in charge of setting      you	received	in	the	mail	and	send	it	with	
low—but	you	must	still	file	your	return	        up	users,	assigning	them	passwords,	and	        your check. This option is not allowed for
electronically through e-File Minnesota.        giving	them	access	to	file	and	pay	taxes	for	   those required to pay electronically (see
                                                the business. The password administrator        below).	Mail	them	to:	Minnesota	Rev-
Due dates.	You	will	not	receive	a	notice	       can change a user’s password and access         enue,	P.O.	Box	64622,	St.	Paul,	MN	55164-
in	the	mail	to	remind	you	to	file	your	         rights,	remove	a	user	or	add	another	user	      0622.	We’ll	continue	to	send	you	payment	
return so it’s important to remember the        at any time by clicking “Administer mul-        vouchers	as	long	as	you	use	them.	Once	
due dates listed below. If the due date falls   tiple users” from the main menu.                you	pay	electronically,	we’ll	stop	send-
on	a	Saturday,	Sunday,	or	legal	holiday,	                                                       ing	vouchers;	however,	you	can	call	us	to	
the next business day becomes the due           Consolidated filers.	If	you	file	a	consoli-
                                                                                                request	a	voucher	at	any	time.
date.                                           dated	return,	you	must	use	the	Internet.	
                                                You can either enter the return informa-
•	 Monthly	filers	–	20th	day	of	the	fol-        tion	for	each	location	separately,	or	attach	   Electronic payment
   lowing month.                                an electronic spreadsheet with informa-         required
•	 Quarterly	filers	–	Apr.	20,	July	20,	Oct.	   tion	for	all	locations.	For	either	method,	     Mandatory electronic payments. If
   20,	and	Jan.	20.                             follow the instructions on the Internet.        you	have	a	sales	and	use	tax	liability	of		
•	 Annual	filers	–	Feb.	5th	of	the	                                                             $10,000	or	more	in	the	state’s	fiscal	year		
   following year.                              Paying the balance due                          (July	1	–	June	30),	you	must	pay	all	taxes	
If	you	do	not	owe	any	tax,	you	must	still	      You must pay your sales and use tax in          electronically beginning with the next
e-file	your	sales	and	use	tax	return.	          one of the following ways.                      calendar year.
                                                Electronically with e-File Minnesota.           Associated payers. If you are required
Filing by Internet or                           This	is	the	easiest	and	most	convenient	        to pay any business tax type to the De-
                                                way to pay your tax—and it’s free. You          partment	of	Revenue	electronically,	you	
phone                                           can	do	it	at	the	same	time	you	file	your	       must pay all business taxes electronically.
For	detailed	information	on	how	to	file,	
                                                return,	and	you’ll	get	a	confirmation	          When	you	fall	into	one	of	the	above	
see Sales Tax Fact Sheet 170, A Step-by-
                                                number so you’ll know your transaction is       categories,	there	will	be	a	message	on	the	
Step Guide to Filing and Paying Sales and
                                                completed. Follow the prompts on the In-        screen when you log into e-File Min-
Use Tax Electronically.
                                                ternet or phone system. You’ll need your        nesota	to	file	your	sales	tax	return	on	the	
To	file	on	the	Internet,	go	to	www.taxes.       bank’s routing number and your account          Internet. This message will appear for a
state.mn.us	and	click	on	the	“Login	            number.                                         short time to initially notify you of the
e-File	Minnesota”	on	the	e-services	menu	                                                       requirement.
                                                Electronically by credit method.	Credit	
for businesses on the right side of the
                                                payments are initiated by you through           Penalty. If you are required to pay elec-
screen.
                                                your	financial	institution.	You	authorize	      tronically	and	do	not,	a	5	percent	penalty	
If	you	don’t	have	Internet	access,	you	can	     your bank to transfer funds to the state’s      (in addition to regular penalties) applies
file	with	a	touch-tone	phone.	Call	1-800-       bank	account.	The	bank	must	use	ACH	            to	payments	not	made	electronically,	even	
570-3329.	                                      file	formats	available	on	our	website	at	       if a paper check is sent on time or early.
                                                www.taxes.state.mn.us or by calling
                                                our	office.	You	could	be	charged	for	each	
                                                transaction.


                                                                    17
Filing electronically (continued)
June accelerated payment.	If	you	have	           The June accelerated payment is due two        If you are required to make an accelerated
a	sales	and	use	tax	liability	of	$120,000	       business	days	before	June	30,	and	the	         payment in the past but your tax liability
or	more	in	the	state’s	fiscal	year	(July	1	–	    remaining payment and return for June          is	now	below	$120,000	for	the	prior	fiscal	
June	30)	you	must	make	an	accelerated	           will	be	due	August	20.	If	you	do	not	make	     year,	you	are	not	required	to	make	a	June		
payment in June of the following year. The       an accelerated payment by two business         accelerated	payment.	You	must	file	your	
following accelerated	tax	payment	provi-         days	before	June	30,	you	will	be	subject	to	   June return and pay your June tax by July.
sions apply to the June payment only. You        a penalty. You are also subject to a penalty   20.
must pay one of these amounts:                   if you underpay your accelerated tax. That
                                                                                                It	is	important	to	review	your	account	to	
                                                 penalty	is	10	percent	of	the	difference	
•		78	percent	of	your	actual	June	liability,	                                                   assure	that	you	are	filing	and	paying	prop-
                                                 between what you are required to pay and
    or                                                                                          erly	in	order	to	avoid	possible	penalties	
                                                 what you did pay.
•		78	percent	of	your	May	liability,	or	                                                        and interest.
•		78	percent	of	your	average	monthly	
    liability	for	the	previous	calendar	year.	




                                                                     18
Claiming a refund
Capital equipment                                be	financed	under	a	special	federal	grant	      •	Correctional facilities.	Cities	and	coun-
Use	Form	ST11, Capital Equipment                 program administered by the Department          ties may be eligible for a refund of sales
Refund Claim to claim a refund for capital       of Veterans Affairs.                            tax paid on construction materials and
equipment.	To	qualify,	the	equipment	                                                            supplies	used	to	construct	or	improve	an	
                                                 A	claim	for	refund	may	be	filed	up	to	three	
must	be	used	for	manufacturing,	fabricat-                                                        adult	or	juvenile	correctional	facility.	
                                                 and a half years from the date the return
ing,	mining	or	refining	tangible	items	          was due or one year after the order date        To	qualify,	the	project	must	be	required	
to	be	sold	ultimately	at	retail;	electroni-      assessing tax on an audit.                      by	state	or	federal	law,	rule	or	regulation.	
cally	transmitting	results	retrieved	by	a	                                                       If materials are purchased by a contrac-
customer of an on-line computerized
data-retrieval	system;	or	for	generat-           Special purchase refunds                        tor	or	builder,	the	contractor	must	give	a	
                                                                                                 statement	to	the	local	government	stating	
ing electricity or steam to sell at retail.      Use	Form	ST11P,	Special Purchase Refund
                                                 Claim,	to	claim	a	refund	of	sales	or	use	tax	   the cost of the construction materials and
You	may	file	only	two	capital	equipment	                                                         supplies and the sales tax paid.
refund claims per year. Fact Sheet 103,          paid on the following:
Capital Equipment.                               A	claim	for	refund	may	be	filed	up	to	three	    •	Low-income housing projects. The
                                                 and a half years from the date the return       owner of a low-income housing project
For sales tax	paid	to	a	seller,	the	claim	                                                       may be eligible for a refund of sales or
must	be	filed	within	3	1/2	years	from	           was due or one year after the order date
                                                 assessing tax on an audit.                      use tax on materials and supplies used or
the	20th	day	of	the	month	following	                                                             consumed	in,	and	equipment	incorpo-
the	month	of	the	invoice	date	for	the	           •	Border city zones. The cities of Breck-       rated	into,	the	construction,	improvement	
purchase of the capital equipment. For           enridge,	Dilworth,	East	Grand	Forks,	           or	expansion	of	qualified	low-income	
use tax	paid	directly	to	the	state,	the	claim	   Luverne,	Moorhead	and	Ortonville	may	           housing projects.
must	be	filed	within	3	1/2	years	from	           designate	areas	as	“border	city	develop-
the due date of the return on which the          ment zones.”                                    To	qualify,	both	the	housing	project	and	
use	tax	was	due,	or	one	year	from	the	                                                           the	owner	must	meet	specific	guidelines	
date	of	an	order	assessing	tax,	if	the	tax,	     Businesses may be eligible for a refund         provided	by	statute	(MS	297A.71	subd.	
penalties and interest shown on the order        of	sales	or	use	tax	paid	on	machinery,	         23).	The	refund	applies	to	the	facility	own-
have	been	paid	in	full,	whichever	period	        equipment and repair parts used in a trade      er or to contractors for use on qualifying
expires later.                                   or business in one of these cities if the       projects.	Call	our	office	for	details.	
                                                 machinery or equipment has a useful life
                                                 of	at	least	12	months.	                         •	Biotechnology and health sciences zone.
Purchaser refunds                                                                                Businesses in a zone designated by the De-
Use	Form	ST11-PUR,	Purchaser Sales Tax           Owners,	users	or	contractors	may	also	          partment of Employment and Economic
Refund Claim, to claim a refund of sales         be eligible for a refund of sales or use tax    Development	(DEED)	as	a	biotechnology	
tax	paid	to	a	vendor	in	error.	You	may	          paid on construction materials used to          and health sciences industry zone may
file	only	two	purchaser	refund	claims	per	       construct a facility for use in a trade or      be eligible for a refund of sales or use tax
year.	To	qualify,	you	must	be	registered	        business located in one of these cities.        paid	on	goods	and	services	used	in	the	
to report sales or use tax and the total         Beginning	July	1,	2002,	sales	or	use	tax	       zone,	and	on	construction	materials	and	
amount requested on each refund claim            may be refunded for building materials for      supplies for construction of real property
must	be	over	$500	in	tax.	                       housing in the zone.                            in the zone. Businesses must apply for and
                                                                                                 receive	a	tax	credit	certificate	from	DEED	
A purchaser claim for refund must be             A	business	must	first	obtain	a	tax	credit	      to	qualify	for	exemption.		Qualifying	busi-
filed	within	3	1/2	years	from	the	20th	day	      certificate	from	the	city	authorizing	the	      nesses may apply for a refund.
of the month following the month of the          refund.	You	may	file	only	two	special	pur-
invoice	date	for	the	purchase.                   chase refund claims per year.                   •	Motor carriers. Interstate motor carri-
                                                                                                 ers may get a refund of part of the sales
                                                 •	Elevators, stair lifts or ramps for dis-      or	use	tax	paid	before	receiving	a	motor	
Disabled veterans                                abled. A refund may be claimed on sales         carrier direct pay number on purchases or
Use	Form	ST11-VA,	Claim for Refund-              tax	paid	on	a	stair	lift,	ramp	or	elevator	     leases of interstate transportation equip-
Veteran’s Homestead.	Disabled	veterans	          installed at a disabled person’s principal      ment,	or	on	parts	and	accessories	for	the	
may be eligible for a refund of sales tax        residence.	The	stair	lift,	ramp	or	elevator	    equipment.	Contact	the	vendor	or	file	an	
paid on building materials used to con-          must be authorized by a physician. The          ST-11PUR	for	sales	or	use	tax	paid	in	er-
struct	or	remodel	their	homes.	To	qualify,	      refund also applies to materials used to        ror after obtaining the motor carrier direct
the construction or remodeling must              install or construct these items.               pay number. Fact Sheet 107, Interstate
                                                                                                 Motor Carriers.




                                                                      19
 Amending a return
If	you	make	an	error	on	your	return,	you	        Don’t use an amended return for                  Amended	returns	may	be	filed	up	to	three	
must	file	an	amended	return	using	e-File         adjustments you can make on a current            and a half years from the date the return
Minnesota-either	over	the	Internet	or	by	
        The procedures for amending Minnesota sales and use tax
phone-to correct the error.
                                                 return,	such	as	adjustments	for:                 was due or one year after the order date
                                                                                                  assessing	tax	(i.e.,	on	an	audit).
                                          •	 bad debts
        filings changed in •	 cash or credit refunds
Note:	Consolidated	filers	must	use	the	 December 2008. You no longer are re- documents for any
                                                                                Keep all supporting
Internet	system	to	file	amended	returns.	 •	 returned checks                    amended returns in your records. These
        quired to calculate the difference between amounts origi-
Our	phone	system	is	not	available	for	
                                          Don’t use an amended return to
                                                                                must	be	made	available	to	the	department	
        nally reported and the correctofamounts. the if	your	business	is	audited.	If	we	find	that	
consolidated	filers.
                                          request a refund sales or use tax for
                                                                                the	amended	returns	were	in	error,	you	
You	must	file	an	amended	return	if	you:          following.	Use	the	specific	form	indicated	
                                                                                                  could be billed for the tax plus penalty and
                                                 below.	See	the	section	“Claiming	a	refund”	
•	     did not report enough tax on your                                                          interest.
                                                 for more information about claims for a
             The new instructions are available at
       original	return;
                                                 refund.
•	     reported too much tax on your origi-                            How to file
             http://www.taxes.state.mn.us/taxes/sales/forms.shtml. the e-File Min-
       nal	return;               •	 Capital	equipment	(use	Form	ST11). To amend a return using
•	     charged an incorrect tax rate on an       •	   Purchasers	claiming	a	refund	of	tax	        nesota	system,	do	the	following:
       item and will refund the tax to the            paid	to	vendors	in	error	(use	Form	
       purchaser;                                     ST11-PUR).                                  1.		 Select the period(s) you are
•	                                                             website at
             Or you can find the instructions by going to our amending. Enter the beginning and
                                   •	
       charged sales tax on an item you               Motor	carriers	(use	Form	ST11P	for	
                                                              ending dates of the reporting period(s)
             www.taxes.state.mn.us and clicking on “Sales and use
       shipped directly to another state (or
       another city or county if local sales
                                                      purchases	made	before	your	MCDP	
                                                              you	are	amending.	On	the	Internet,	
                                                      was	issued;	use	Form	ST11-PUR	for	
                                                              you can amend more than one report-
             tax” in the left navigation. Click on “How to amend taxes amended return.
       taxes are applicable) and will refund
       the	tax	to	the	purchaser;
                                                      purchases	made	after	your	MCDP	
                                                              ing period on a single
                                                      was issued).
•	           by Internet” from the•	 Online services menu.
       charged sales tax on nontaxable                        On	the	phone,	only	one	period	can	be	
                                                      Correctional	facilities	(use	Form	
                                                              amended	at	a	time.	You	must	enter	2	
       items and will refund the tax to the           ST11P).
       purchaser;                                •	   Stair	lifts,	elevators	and	ramps	for	the	       digits	for	the	month	and	4	digits	for	
•	     received	a	valid	exemption	certificate	        disabled	(use	Form	ST11P).                      the year.
       from a customer to exempt a sale          •	   Low-income	housing	projects	                2.	 Select the reason for amending the
       reported in a prior period and will            (ST11P).                                        return.	On	the	Internet,	you’ll	select	
       refund	the	tax	to	the	purchaser;          •	   Other special construction contract             the	reason	from	a	list.	On	the	phone,	
•	     reported sales or purchases in the             exemptions,	border	city	zones,	etc.	            you’ll enter a two-digit reason code.
       wrong tax type.                                (use	Form	ST11P).                               See the next page for reason codes and
                                                 •	   Disabled	veterans	(use	form	ST11-               explanations.
                                                      VA).


     Example
     You	make	several	sales	to	an	organiza-      By Internet                                          indicate	you	overpaid	$83.	Now,	click	
     tion	over	a	three-month	period,	charge	     1.	 Select	File an amended return and                Continue.
     sales	tax,	and	report	the	tax	on	your	          enter the beginning and ending peri-         5.	 Because	this	amended	return	covers	
     monthly returns.                                ods	being	amended	(May	–	July),	and	             multiple	periods,	the	screen	will	
     Later,	the	organization	gives	you	an	           the reason for amending the return.              list each period separately. For each
     exemption	certificate	and	requests	a	           Then,	click	Continue.                            period,	fill	in	the	change	in	tax	for	
     refund of the tax paid in error.            2.	 Select	the	reason	for	amending	the	              that	period.	In	this	example,	you	
                                                     return,	enter	a	contact	name,	phone	             would	fill	in	-20	for	May,	-36	for	June	
     The sales incorrectly taxed were:               number,	and	explain	the	reason	for	the	          and	-27	for	July	using	minus	signs	to	
                  Amount                             change in the text box.                          indicate	the	tax	was	overpaid.	Click	
     Month        of sale       Tax                                                                   Calculate to	figure	the	interest.	
                                                 3.	 Enter	0	(zero)	on	the	Gross receipts line
     May           $300         $20                                                                   Then,	click	Continue.
                                                     since there is no adjustment to this
     June            550         36
                                                     amount.                                      6.	 Print	or	save	your	confirmation	num-
     July            420         27
                                                 4.	 Enter	-1270	on	the	General rate sales            ber for your records.
     Total        $1,270        $83                  line (taxable amount). Be sure to
                                                     include a minus sign to indicate you
                                                                                                  By phone
                                                                                                  Enter the same information by phone as
                                                     overpaid	tax	and	need	a	refund.	Click	
                                                                                                  you	would	over	the	Internet,	but	amend	
                                                     Calculate	to	figure	the	tax.	In	this	
                                                                                                  each period separately.
                                                     example,	the	tax	would	show	-83	to	

                                                                      20
Amending a return (continued)
3.		Enter the change. When amending a
    return,	you	enter	only	the	net change
    amount (the difference between
    what	you	previously	reported	and	           Reason codes for amending returns
    the	correct	amount),	not	the	actual	
    corrected	figures.	See	the	example	on	
    the	previous	page.	Be	sure	to	do	the	       Code Reason                              Code Reason
    following	when	entering	your	figures:
                                                14   Advertising materials and           23   Resale exemptions. Sales tax
•	   Use a minus sign before any amounts             exempt publications. Sales tax           charged on items to be sold or
       The procedures for amending Minnesota sales and use tax
     you	overpaid.	If	filing	by	phone,	use	          charged incorrectly to customers         leased by your customer at retail.
     the asterisk key (*) for the minus
       filings changed in December 2008. You no longer are re-
     sign.
                                                     (or use tax accrued) on exempt
                                                    24
                                                     publications	or	advertising	mate-
                                                                                              Resource recovery exemp-
                                                                                              tions. Sales tax incorrectly
•	
•	     quired to calculate the difference between amounts origi-
     Round all amounts to whole dollars.
     Don’t use commas.
                                                     rials shipped out of state.              charged on items purchased
•	
       nally reported and the 15
                               correct amounts.
     Enter the net change amount (not
     the	corrected	figures).
                                                     Agricultural and industrial
                                                     production exemption. Sales
                                                                                              with	a	resource	recovery	facility	
                                                                                              exemption	certificate.
•	   If no adjustment to gross receipts is           tax incorrectly charged to          25   Sales tax accounting errors.
     necessary,	enter	zero	on	that	line.             customers (or use tax accrued)           Incorrect taxable amount used to
•	     The new instructions are available at
     Be sure to adjust the correct tax               on	materials,	packaging	supplies	        calculate tax liability on original
     type.	For	example,	if	you	are	adjust-           or	short-lived	accessory	tool-           return.
       http://www.taxes.state.mn.us/taxes/sales/forms.shtml.
     ing both Minnesota and Minne-
                                                 26
                                                     ing consumed in agricultural or
                                                                                              Special tooling. Sales tax
     apolis	sales	tax,	enter	the	net	change	         industrial production.
     amount on each of these tax lines.                                                       incorrectly charged (or use tax
                                                16   Direct pay certificate                   accrued) on special tooling.
       Or you can find the instructions by going to our website at
The system will calculate the interest. If           holders. Sales tax incorrectly
                                                      27                                      Including tax in taxable
you’re amending multiple periods on                  charged to customers (or use
       www.taxes.state.mn.us and clicking on “Sales and use
one	return	(available	on	Internet	only),	            tax accrued) on items purchased
                                                                                              amount. Tax incorrectly includ-
                                                                                              ed in the taxable amount used to
you’ll need to enter the change in tax for           with	a	direct	pay	certificate.
       tax” in the left navigation. Click on “How to amend taxes
each period so that the interest can be
                               17                    Exempt organization/federal
                                                                                              calculate your sales-tax liability.

       by Internet” from the Online services menu. 28
calculated correctly (see example on the
previous	page).
                                                     government. Sales tax incor-
                                                                                              Paying tax to another state.
                                                                                              Sales tax incorrectly charged (or
                                                     rectly	charged	to	a	charitable,	
                                                                                              use tax accrued) on items legally
4. Keep your confirmation number and                 religious or educational orga-
                                                                                              taxable	in	another	state,	when	
   filing	date	for	your	records.                     nization;	Indian	tribal	council;	
                                                                                              the other state’s tax was paid or
                                                     the	federal	government;	or	an	
                                                                                              assessed in an audit. (See Vari-
Balances due and                                     exempt	local	government	agency	
                                                     such as a school or hospital.
                                                                                              able-rate purchases in the section
refunds                                         18   Farm machinery. Sales tax
                                                                                              “Preparing	to	file	your	return”	if	
The system will automatically calcu-                                                          the	other	state	has	a	sales/use	tax	
                                                     charged	at	an	incorrect	rate,	or	        rate different from the Minnesota
late any amount due or refund. If your
amended return results in additional tax             tax charged on exempt repair             rate.)
due,	you	can	either:                                 parts or farm machinery.
                                                                                         29   Tax paid twice. Sales tax
                                                19   Interstate commerce/inter-               charged and use tax accrued on
•	   Pay	the	additional	tax	electronically	
                                                     city commerce. Sales tax or              the same sales transaction.
     using	the	e-File	Minnesota	system;	or
                                                     city sales tax charged on items
•	   Call	our	office	and	ask	that	we	send	                                               30   Use tax accrual errors. Tax-
     you	a	payment	voucher.	File	your	               shipped out of state or out of
                                                                                              able amount used to calculate
     amended return electronically and               city.
                                                                                              use-tax liability determined
     send us your check with the payment        20   Leases of tangible items.                incorrectly.
     voucher.                                        Sales tax charged on equipment
                                                                                         31   Utilities (electric, gas, steam,
                                                     that	was	part	of	a	lease/finance	
If your amended return results in a reduc-                                                    water or other fuels). Sales tax
tion	in	the	amount	of	tax	due,	we	will	              agreement	or	a	sale/leaseback	
                                                                                              incorrectly charged to customer
refund it to you. Do not take credit on              agreement.
                                                                                              who is exempt for agricultural or
other returns for the overpayment.                                                            industrial	production,	or	residen-
If the original return that you are amend-                                                    tial use.
ing	was	filed	late,	penalty	and	interest	                                                32   Other. Use only if none of the
will apply to any additional amount that                                                      codes	listed	above	describes	the	
you	owe.	(Note:	this	amount	will	not	be	                                                      error.
calculated	in	e-File;	a	separate	bill	may	be	
sent.)
                                                                21