Minnesota Sales Tax and Use Tax
What is the Minnesota sales tax?
Taxes in Minnesota are destination-based, meaning the Minnesota sales tax rate is based, or determined from, the destination location an item is shipped to. This complicates business for retailers who need to have the exact and up-to-date sales tax rate for every shipment they make.
To see a full breakout of Minnesota sales tax rates by state, county, city and special district, use our easy Minnesota sales tax calculator. After putting in any ZIP code, you can enter a retail price to calculate Minnesota sales tax totals.
What is the Minnesota use tax?
The Minnesota state use tax rate is the same as the state, county, city and special district rates.
If you reside in MN, use tax is due to the state on any and all transactions where sales tax has not been paid, even out-of-state internet sales.
Who has to pay Minnesota sales tax or use tax?
In general, a business must collect and remit all applicable Minnesota sales taxes if that business has nexus, a physical presence such as a brick-and-mortar location, within a given state. The presence of an employee or salesperson, delivery by the seller's vehicle, and storage of materials usually establishes nexus as well.
Minnesota says that an out-of-state seller is required to collect tax if they can be defined as "retailers maintaining a place of business". Minnesota has certain additional laws establishing nexus for other reasons such as out-of-state businesses using in-state affiliates, advertisers or vendors, or businesses that make internet sales or mail catalogs.
If you are not sure if you have established nexus in Minnesota, you can usually get free help by contacting the Minnesota Department of Revenue. Click here for an updated listing of direct phone numbers. You could also contact a qualified certified public accountant or lawyer who specializes in tax law in Minnesota. Click here for listing of recommended resources.
Special rules applying to Minnesota sales tax and use taxes
- Shipping is taxable.
- Finance charges are exempt from sales tax, when stated separately.
- Clothing is tax exempt, except for clothing and footwear of certain types.
- Minnesota Sales tax holidays are not planned for this state .
Since Minnesota legislators can vote to change the Minnesota sales tax and use tax rates at any time, it is very difficult for individuals to keep track of the changes. The population of MN state is also rapidly changing, which can cause frequent updates to the ZIP codes and local municipality names and complicates the job of keeping track of Minnesota sales tax jurisdictions.