State of Minnesota Flag

Minnesota Sales Tax Guide for Businesses

Sales Tax Rate
6.875%
Local Taxes
Yes
Website
Department of Revenue
Tax Line
651-296-6181

We wrote this guide for online sellers who want to know if they even have to bother with sales tax in Minnesota, and if so, how best to tackle the sales tax situation in the Land of 10,000 Lakes.

After reading this, you’ll know:

  • Do you or don’t you need to collect Minnesota sales tax?
  • Which customers do you collect from?
  • How much do you collect?
  • What do you do with all the sales tax you’ve collected?
  • Way more than you probably ever wanted to know about Minnesota sales tax

Do you have sales tax nexus in Minnesota?

Good news! You only have to begin thinking about Minnesota sales tax if you have sales tax nexus in Minnesota.

Sales tax nexus” is just a fancy way of saying “significant presence” in a state.

Minnesota considers a seller to have sales tax nexus in the state 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 I have sales tax nexus in Minnesota if I sell on Amazon FBA?

Online retailers are increasingly using Fulfillment by Amazon to sell their products. According to Minnesota’s rules of nexus, a seller who stores items in a physical location in the state – including an Amazon Fulfillment Center – has sales tax nexus there and must collect sales tax from Minnesota buyers.

To determine whether or not you have items stored in an FBA warehouse in Minnesota, you can do one of two things:

  1. Login to Amazon Seller Central and pull your inventory report
  2. Try a 30-day free trial of TaxJar and we’ll show you you the states from where your items are shipping with our Amazon badge feature

Currently Minnesota only has one Amazon fulfillment center:

Warehouse Code Address County Tax Rate
MSP1 2601 4th Ave E, Shakopee, MN 55379 Scott 7.375%

Read here for more about Amazon FBA and sales tax nexus. Here’s a list of all Amazon Fulfillment Centers in the country.

Is what you’re selling even taxable?

You’ve probably read this far because you realized you have sales tax nexus in Minnesota. Your next step is to determine if what you’re selling is even taxable.

Services in Minnesota are generally not taxable. So if you’re a freelance writer or a plumber, you’re in luck and you don’t have to worry about sales tax. But watch out – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.

Tangible products are taxable in Minnesota, with a few exceptions. These exceptions include things like clothing, baby products and over-the-counter drugs and See Minnesota’s sales tax guide starting on page 7 for more about what isn’t taxable in Minnesota.

So if you sell toys, then charge sales tax to your Minnesota customers.

But if you’re a graphic designer, don’t charge sales tax to your Minnesota customers.

If you have sales tax nexus in Minnesota and your products are taxable, your next step is to register for a sales tax permit.

How to Register for a Sales Tax Permit in Minnesota

Sellers with sales tax nexus in Minnesota must apply for an Minnesota sales tax permit.

Don’t skip this step! Many states consider it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in Minnesota.

How to Collect Sales Tax in Minnesota

So you’ve determined that you have sales tax nexus in Minnesota and what you’re selling is taxable. And you’re all set and registered for your Minnesota sales tax permit.

The next step is to determine how much sales tax to collect.

Minnesota is an destination-based sales tax state. So if you live in Minnesota, collecting sales tax can be tricky.

Collect sales tax at the rate of your buyer’s ship to address.

You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator or by going to TaxJar.com/mobile on your mobile device.

Example: You live and run your business in Rochester, MN., in the 55901 zip code, where the tax rate is 7.63%. But you make a sale to a buyer in Edina in the 55436 zip code where the sales tax rate is 7.78%. Because Minnesota is a destination-based sales tax state, you would charge your buyer their local 7.78% rate.

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.

What are the Amazon sales tax settings for Minnesota?

If you are an Amazon pro seller and use Amazon to collect sales tax, be sure you have your sales tax settings set up correctly. Find step-by-step instructions for setting up your Amazon sales tax settings here.

If you are a… State tax County tax City tax District tax Custom rate Is shipping taxable? Is gift wrapping taxable?
Seller living in Minnesota X X X X N/A Yes Yes
Seller living outside of Minnesota X X X X N/A Yes Yes

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.

Read a full explanation of sales tax on shipping in Minnesota here.

Rank City Population County Total SalesTax
01 Minneapolis 410,939 Hennepin 6.875%
02 St. Paul 300,851 Hennepin 6.875%
03 Rochester 112,225 Olmsted 6.875%
04 Bloomington 86,435 Hennepin 6.875%
05 Duluth 86,110 St Louis 6.875%
06 Brooklyn Park 79,149 Hennepin 6.875%
07 Plymouth 75,907 Hennepin 6.875%
08 Maple Grove 68,385 Hennepin 6.875%
09 Woodbury 67,855 Washington 6.875%
10 St. Cloud 67,109 Stearns 6.875%
11 Eagan 66,286 Dakota 6.875%
12 Eden Prairie 63,496 Hennepin 6.875%
13 Coon Rapids 62,240 Anoka 6.875%
14 Blaine 62,124 Anoka 6.875%
15 Burnsville 61,481 Dakota 6.875%
16 Lakeville 60,633 Dakota 6.875%
17 Minnetonka 51,669 Hennepin 6.875%
18 Apple Valley 51,221 Dakota 6.875%
19 Edina 50,138 Hennepin 6.875%
20 St. Louis Park 48,171 Hennepin 6.875%

Top 20 Most Populous Cities in Minnesota and their Sales Tax Rates (June 2017)

When are Minnesota Sales Tax 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.

How often you are required to file sales tax in Minnesota follows this general rule:

Average Monthly Tax Liability Filing Frequency
$500.01 and up Monthly
$100.01 to $500.00 Quarterly
$0 to $100.00 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.

2017 Minnesota Monthly Sales Tax Filing Due Dates

Taxable Period Due Date
*January February 21, 2017*
February March 20, 2017
March April 20, 2017
*April May 22, 2017*
May June 20, 2017
June July 20, 2017
*July August 21, 2017*
August September 20, 2017
September October 20, 2017
October November 20, 2017
November December 20, 2017
* December January 22, 2018*

*indicates a due date pushed back due to a weekend or holiday

2017 Minnesota Quarterly Sales Tax Filing Due Dates

Taxable Period Due Date
Q1 (Jan - Mar) April 20, 2017
Q2 (Apr-Jun) July 20, 2017
Q3 (Jul-Sep) October 20, 2017
*Q4 (Oct-Dec) January 22, 2018*

*indicates a due date pushed back due to a weekend or holiday

2017 Minnesota Annual Sales Tax Filing Due Dates

Taxable Period Due Date
*Year 2016 February 5, 2017*
Year 2017 February 5, 2018

*indicates a due date pushed back due to a weekend or holiday

Click here for a chart of Minnesota sales tax filing due dates in 2017.

How to File Sales Tax in Minnesota

When it comes time to file sales tax in Minnesota you must do three things:

  1. Calculate how much sales tax you owe
  2. File a sales tax return
  3. Make a payment

We’ll walk you through these steps.

How to Calculate How Much Sales Tax You Owe in Minnesota

Calculating how much sales tax you should remit to the state of Minnesota is easy with TaxJar’s Minnesota sales tax report.

All you do is 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 - 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.

Other Facts You Should Know about Minnesota Sales Tax Filing

There are a few more things you should know about sales tax in Minnesota:

Penalties:

If you don’t pay the sales tax you owe to the state on time, you owe a penalty of 4 percent.

Other penalties for fraud or serial offenses include higher penalties and even criminal charges.

“Zero returns”:

Minnesota requires that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay. Click here for a list of states that require zero sales tax returns.

And that’s it. You’ve mastered Minnesota sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.

Minnesota Sales Tax Resources

For more about Minnesota sales tax, check out the Minnesota section of the TaxJar blog.

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