(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
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
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
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
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.
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
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
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
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
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
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
166 Parking Services
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.
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-
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.
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
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
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
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
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.
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
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
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
(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.
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
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-
pleted Form ST3.
• Metropolitan Council. MTC buses,
light rail transit vehicles and repair
• Purchases by school districts and
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
Health Care Facilities, #172 Printing Industry, #109
Advertising Creative Promotional
Health Product Exemptions, #117E Prosthetic Devices, #117D
Hospital and Nursing Home Meals, #118
Agricultural Production, #100
Hotels and Lodging Facilities, #141 Recreational Areas, Resorts, & Camp
Aquaculture Production Equipment,
Indians, #160 Residential Utilities, #157
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,
Laundry and Cleaning Services, #120 #148
Lawn and Garden Care, Tree and Bush Soft Drinks and Other Beverages, #102C
Service, #121 Special Local Taxes; Minneapolis,
Capital Equipment, #103
Rochester and St. Cloud, St. Paul, #164S
Local Sales and Use Taxes, #164
Loggers and Log Home Builders, #153 Taconite and Iron Mining, #147
Computer Software, #134
Logging Equipment, #108 Telecommunications Services, #119
TV Commercials, #163
Coupons, Discounts and Other Forms of
Manufactured Homes, Park Trailers and
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
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
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
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.
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-
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
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
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.
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
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.
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
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-
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
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.
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
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
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
• 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
• 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.
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
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
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-
(or use tax accrued) on exempt
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
Enter the net change amount (not
the corrected figures).
Agricultural and industrial
production exemption. Sales
with a resource recovery facility
• 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.
ing both Minnesota and Minne-
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
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