MN Minnesota State sales tax rates
STATEWIDE SALES TAX RATE
ECONOMIC SALES THRESHOLD
Do you need to collect sales tax in Minnesota?
You’ll need to collect sales tax in Minnesota if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Minnesota?
Minnesota considers a seller to have physical nexus if you have any of the following in the state:
- have an office; distribution, sales, or sample room location; warehouse or other place of business in Minnesota, either directly or by a subsidiary
- have a representative, agent, salesperson, canvasser, or solicitor in Minnesota, on either a permanent or temporary basis, who operates under the authority of the retailer or its subsidiary for any purpose, such as repairing, selling, delivering, installing, soliciting orders for the retailer’s goods or services, or leasing tangible items in Minnesota;
- deliver items into Minnesota in their own vehicles;
- provide taxable services in Minnesota
- have entered into an agreement with a solicitor for the referral of Minnesota customers for a commission and your gross receipts over 12 months is at least $10,000.
Do you have economic nexus in Minnesota?
Effective October 1, 2019, Minnesota considers businesses who make over $100,000 in gross revenue in the last 12 months or makes sales into Minnesota in more than 200 separate transactions in the previous 12 months to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state.
Is what you’re selling taxable?
Services in Minnesota are generally not taxable. However – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.
Retail sales of tangible products are taxable in Minnesota, with a few exceptions. These exceptions include things like clothing, baby products and over-the-counter drugs.
Is SaaS taxable in Minnesota?
SaaS is non-taxable in Minnesota.
Collecting Sales Tax
Minnesota is a destination-based sales tax state. So if you live in Minnesota, collecting sales tax can be challenging as you will need to collect sales tax at the rate of your buyer’s ship to address.
You can also consult the Minnesota Department of Revenue’s sales tax rate map of Minnesota for a visual guide to calculating sales tax in cities like Duluth and Minneapolis.
If you are based in another state but have sales tax nexus in Minnesota, do the same thing: collect sales tax at the rate of your buyer’s ship to address.
Should you collect sales tax on shipping charges in Minnesota?
The state of Minnesota wants you to charge sales tax on shipping charges to your customers if the items you shipped are taxable. If the items you shipped are not taxable, then you also don’t have to charge sales tax on shipping charges.
When are Returns Due?
When you file and pay Minnesota sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Minnesota?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Minnesota, you will be required to file and remit sales tax either monthly, quarterly, or annually.
Minnesota sales tax returns are almost always due the 20th of the month following the reporting period. (The exception is the annual sales tax return, which is due February 5th the year following the taxable period.) If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.