Sales Tax APIThe same engine Zamp customers use.Running a business is tough, and navigating sales tax complexities can make it even harder.
Don’t worry — this Minnesota sales tax guide was created to help simplify it all. We’ll explore the sales tax rates across the state, determine if you need to collect them, and when to file and pay your taxes.
And to make things even easier, we’ll share a trusted solution to streamline sales tax management and keep your business compliant across the country.
Collecting Minnesota Sales Tax from Customers
Collecting Minnesota sales tax from customers can be complicated. Here’s what you need to understand in the state.
Do I Have to Collect Minnesota Sales Tax from Customers?
You’ll need to collect Minnesota sales tax if you meet these two requirements:
- You have a sales tax nexus in Minnesota
- You sell taxable products or services in Minnesota
What Creates Sales Tax Nexus in Minnesota?
You have a sales tax nexus in Minnesota if you meet any of the following factors:
- Physical presence: Businesses that sell or lease property in Minnesota, such as offices, healthcare facilities, distribution centers, etc.
- Representatives: Companies with employees, representatives, salespersons, and independent contractors in Minnesota.
- Delivery: Businesses that deliver tangible personal property into Minnesota in their own vehicles.
- Economic nexus: Companies with more than 200 retail sales shipped to Minnesota or that make more than $100,000 in retail sales shipped to Minnesota.
Zamp Tip
If you’re a remote seller and don’t meet these thresholds, you’ll be eligible for the Small Seller Exception.
Do I Have to Collect Sales Tax from Minnesota Customers if I Sell on Amazon, Walmart, eBay, or Etsy?
No.
Minnesota has a marketplace facilitator law requiring platforms like Amazon to collect sales tax for third-party sellers on their platforms. However, if a marketplace facilitator’s sales are under $100,000, they don’t need to register, collect, or remit Minnesota sales tax.
Zamp Tip
If you meet Minnesota’s other sales tax nexus requirements, you’re still responsible for collecting sales tax on any non-marketplace sales in the state.
Taxable Products in Minnesota
Minnesota applies sales tax to most tangible personal property and services, including food and services. Here’s an overview of taxable items in Minnesota:
Are Groceries Taxable in Minnesota?
No, groceries are not taxable in Minnesota.
Is Clothing Taxable in Minnesota?
Clothing is generally not taxable in Minnesota, though there are a few exceptions. Accessories, fur, sports, recreational, and protective clothing are taxable.
Are Digital Products Taxable in Minnesota?
Yes, specified digital products are taxable in Minnesota. However, some digital products that aren’t taxable are digital newspapers, photos, materials used to produce a retail item as well as students’ digital textbooks.
Is Software as a Service (SaaS) Taxable in Minnesota?
No, SaaS is non-taxable in Minnesota.
Are Services Taxable in Minnesota?
Most services are non-taxable. However, there are a few exceptions that include:
- Admissions to regular season school games, events, concerts, plays, and activities
- Lodging
- Massages if part of ongoing treatment
- Pet grooming, boarding, and care services
- Telecommunications services
Tax-Exempt Items
Some items that are sales tax exempt in Minnesota are:
- Clothing, like formal wear, sandals, karate uniforms, and more.
- Food, like baking powder, cereals, dairy products, and more.
- Medicines, acne medications, antihistamines, burn drugs, and more.
- Secure firearm storage units.
- Barbershop services, like hair cutting, spa, hair removal, and more.
How to Register for a Minnesota Sales Tax Permit
You can register for a Minnesota sales tax permit at the Business Tax Registration. Alternatively, you can call to register at 651-282-5225 or 1-800-657-3605 (toll-free).
Learn how to register for a seller’s permit in every US state.
Do I Need a Minnesota Sales Tax License if I’m Only a Wholesaler?
Wholesalers should have completed Form ST3 Certificate of Exemption to be exempt from sales tax.
Do I Need a Minnesota Seller’s Permit if I Only Sell Temporarily in the State?
In most cases, Minnesota requires that you register and collect sales tax even if you only make a temporary sale in the state.
However, you don’t need to register for sales tax if you meet all of the following conditions:
- You sell at only one event per calendar year that doesn’t last more than three days.
- You make sales of $500 or less during the calendar year.
- The seller provides a written statement verifying the above and provides their name, address, and telephone number.
How to Collect Sales Tax in Minnesota
Minnesota uses a destination-based sales tax sourcing state. This means that if you sell to a resident in Minnesota from another state, you must apply the sales tax rate based on the buyer’s shipping address.
Should You Collect Sales Tax on Shipping Charges in Minnesota?
Yes, shipping charges are subject to sales tax in Minnesota.
How to File and Pay Sales Tax in Minnesota
There are multiple ways to file and pay Minnesota transaction privilege tax:
- File and pay online: File online at MN e-services as Minnesota requires online filing.
- Or, let Zamp handle your Minnesota sales tax filing and remittance so you never have to look at a sales tax return again!
Explore how you can file and pay sales tax in other US states.
