The 10 Basics Every Minnesota Business Should Know About Sales Tax

What is the Sales Tax Rate in Minnesota?

The Minnesota state sales tax rate is currently 6.875%. Depending on local municipalities, the total tax rate can be as high as 8.375%.

What is Sales Tax in Minnesota?

Sales tax in Minnesota is charged on most sales and rentals of tangible personal property and several services.

Are All Goods and Services Taxable?

No

How Do I Know What’s Taxable and What’s Not?

This link can help you determine what is taxable and what isn’t in Minnesota. Click here.

Who Pays Sales Tax?

Consumers pay sales tax.  Merchants do not pay sales tax out of their own pockets.  It’s commonly referred to as a pass through tax.

What Am I Responsible For?

You are required to collect sales tax, hold it secure and send it to the State on-time and in-full.

When Is My Sales Tax Payment Due in Minnesota?

Minnesota Sales Tax is due on the 20th of the month following the reporting period. Filing frequency is determined by the amount of sales tax collected. Click here for a list of due dates.

How Do I Know How Much Sales Tax to Charge? 

Minnesota state sales tax rate is 6.875%. Depending on local municipalities, the total tax rate can be as high as 8.375%. Find more information here.  The final and definitive answer is always the sales tax rate posted on the State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In Minnesota all sales tax is paid directly to the State.

How Do I Manage Tax Exempt Sales?

Tax exempt organizations such as schools and religious organizations are often exempt from sales tax. They are required to give you copy of their “TAX EXEMPT CERTIFICATE” at the time of the sale and you are required to keep this certificate on file. Failing to do so may result in you paying the sales tax out of your own pocket if you have a sales tax audit.

What if I Forget to Pay or Spend the Money and Can’t Pay?

Minnesota has severe penalties for missing tax payments. You can find the penalties for late payments here. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

Minnesota Sales and Use TAX HELP:

Minnesota Department of Revenue

(651) 296-6181