Some goods are exempt from sales tax under Minnesota law. Examples include most grocery items, feminine hygiene products, and medical supplies.
We recommend businesses review the laws and rules put forth by the Minnesota Department of Revenue to stay up to date on which goods are taxable and which are exempt, and under what conditions. Some customers are exempt from paying sales tax under Minnesota law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale.
Sellers are required to collect a valid exemption or resale certificate from buyers to validate each exempt transaction. In some cases, late fees and interest will be applied and can result in large, unexpected bills. Sales tax holidays exempt specific products from sales and use tax for a limited period, usually a weekend or a week. Approximately 17 states offer sales tax holidays every year.
The Minnesota Department of Revenue will then distribute it appropriately. Filing a Minnesota sales tax return is a two-step process comprised of submitting the required sales data filing a return and remitting the collected tax dollars if any to the Minnesota DOR.
The filing process forces you to detail your total sales in the state, the amount of sales tax collected, and the location of each sale.
Online filing is generally recommended through the Minnesota E-Services portal , but returns by phone are acceptable. The Minnesota Department of Revenue will assign you a filing frequency.
Typically, this is determined by the size or sales volume of your business. State governments generally ask larger businesses to file more frequently. See the filing due dates section for more information. Minnesota sales tax returns and payments must be remitted at the same time; both have the same due date. You may file directly with the Minnesota DOR by visiting their site and entering your transaction data manually.
This is a free service, but preparing Minnesota sales tax returns can be time-consuming — especially for larger sellers. To save time and avoid costly errors, many businesses outsource their sales and use tax filing to an accountant, bookkeeper, or sales tax automation company like Avalara. This is a normal business practice that can save business owners time and help them steer clear of costly mistakes due to inexperience and a lack of deep knowledge about Minnesota sales tax code.
Avalara Returns for Small Business is an affordable third-party solution that helps business owners simplify the sales tax returns process and stay focused on growing their business. Learn how automating the sales tax returns process could help your business.
See our offer to try Returns for Small Business free for up to 60 days. Terms and conditions apply. When no sales tax was collected, you must file a "zero return.
Failure to submit a zero return can result in penalties and interest charges. The Minnesota DOR requires all businesses to "close their books" by filing a final sales tax return.
This also holds true for business owners selling or otherwise transferring ownership of their business. Many states encourage the timely or early filing of sales and use tax returns with a timely filing discount. The Minnesota DOR requires monthly and quarterly sales tax filing to be completed by the 20th day of the month following the tax period. Below, we've grouped Minnesota sales tax filing due dates by filing frequency for your convenience.
Due dates falling on a weekend or holiday are adjusted to the following business day. Filing a Minnesota sales tax return late may result in a late filing penalty as well as interest on any outstanding tax due. For more information, refer to our section on penalties and interest. In the event a Minnesota sales tax filing deadline was missed due to circumstances beyond your control e. However, you may be asked to provide evidence supporting your claim. Failure to file returns and remit collected tax on time may result in penalties and interest charges, and the longer you wait to file, the greater the penalty and the greater the interest.
Shipping and handling charges in Minnesota are considered part of the sales price even when separately stated, and should be applied to taxable sales and omitted on exempt sales. For sales with both taxable and exempt products, tax should be charged based on the percentage or weight of the taxable goods.
Delivery services provided and billed by a third-party delivery service are generally exempt, except for deliveries of aggregate materials and concrete block. There are exceptions to almost every rule with sales tax, and the same is true for shipping and handling charges.
Specific questions on shipping in Minnesota and sales tax should be taken directly to a tax professional familiar with Minnesota tax laws. I'm interested in learning more about Avalara solutions. Chat with a sales tax specialist. I am an Avalara customer and want to chat about my products and services.
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Other exempt items include meals provided in early childhood education programs or daycare, pre-k through 12th grade schools, nursing homes, senior homes, correctional facilities, and detox facilities. Sales to certain types of organizations, including nonprofits, may also be exempt if the buyer has obtained a proper exemption certificate from the state ahead of time. If you provide a service at a permanent physical location, you will charge the sales tax applicable at that location.
If you or your employees travel to provide the service, the rate in effect where the service is provided will apply.
Before you collect any sales tax in Minnesota, you must register with the state, which can be done online through the Department of Revenue website or over the phone. You can choose between filing once under a single Minnesota tax ID number for all your locations, if you have more than one, or you can obtain a separate ID number for each and file separate returns. In Minnesota, you must file your sales tax return annually, quarterly, or monthly, depending on the amount of tax you usually collect.
Your filing must be:. Local Sales Tax Requirements for Sellers. Remote Sellers FAQs. We offer classroom training, webinars, and videos. See our educational opportunities. Legislative Bulletins. Revenue Notices. Minnesota Statutes, Chapter A. Minnesota Statutes, Chapter B. Minnesota Rules, Chapter Sales and Use Tax.
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