Businesses and online sellers must ensure they remain in compliance with the sales tax laws in Minnesota when they provide sales in the state. Any business or online retailer with either a physical nexus or that meets Minnesota’s economic nexus threshold is required to file a sales tax return and remit sales tax payments. Learn more about your sales tax obligations in Minnesota and use TaxJar’s sales tax guide and calculator to estimate your potential sales tax liability.
Do you need to collect sales tax in Minnesota?
Businesses and online sellers that have either physical or economic nexus in Minnesota need to collect sales tax. Physical nexus means a business has a tangible presence or activity in the state. Economic nexus means that a business or seller has met the 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 they:
- 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
- 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 that make over $100,000 in gross revenue in the last 12 months or make 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. Learn more about Minnesota’s economic nexus guidance for businesses.
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 clothing, baby products, and over-the-counter drugs. You can review what is and isn’t taxable in Minnesota in their online sales and use tax guide.
Is SaaS taxable in Minnesota?
SaaS is non-taxable in Minnesota.
How to get a sales tax permit in Minnesota
Businesses and sellers that need to collect sales tax must register for a Minnesota Tax ID Number and a Sales and Use Tax Account. Take these steps to register your business with the state:
- You may register for a Minnesota tax ID number online at Minnesota e-Services.
- You may register by telephone by calling 651-282-5225 or 1-800-657- 3605.
- Or visit our registration page to request that TaxJar manage your Minnesota registration for you.
Use the Streamlined Sales Tax™ Registration System (SSTRS)
Minnesota is a Streamlined Sales Tax™ Member state. The Streamlined Sales Tax™ Registration System is a central hub for registering for sales tax permits in member states, simplifying the permit process for online sellers with economic nexus across multiple states. Through the system, businesses can apply for a license in any member state. Businesses also can opt to contract with a Certified Service Provider™ (CSP™ ), who serves as a sales tax concierge and provides sales tax assistance to businesses in all the states where they are registered through the SSTRS.
Collecting sales tax
Minnesota is a destination-based sales tax state. If you live in Minnesota, you will need to collect sales tax at the rate of your buyer’s ship-to address.
You can research your local sales tax rate with TaxJar’s Sales Tax Calculator. 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, 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 don’t have to charge sales tax on shipping charges. Learn more about when businesses and online sellers need to charge sales tax on shipping in Minnesota.
When are returns due?
When you file and pay Minnesota sales tax depends on your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Minnesota?
States assign businesses a filing frequency when they register for a 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.
Filing sales tax
Follow these three steps when you need to file sales tax in Minnesota:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to calculate how much sales tax you owe in Minnesota
Calculating how much sales tax you must remit to the state of Minnesota is easy with TaxJar’s Minnesota sales tax report. Connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Minnesota sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to file and pay sales tax in Minnesota
You have three options for filing and paying your Minnesota sales tax:
- File online at the Minnesota Department of Revenue. You can remit your payment through their online system. If you have a sales and use tax liability of $10,000 or more in the state’s fiscal year (July 1 June 30), you must pay all taxes electronically beginning with the next calendar year.
- File by phone – Call 1-800- 570-3329 to file by touch-tone phone. If you have a sales and use tax liability of $10,000 or more in the state’s fiscal year (July 1 – June 30), you must pay all taxes electronically beginning with the next calendar year.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.
