Taxation in Minnesota can be a tricky business. While most services are exempt from taxation, there are some exceptions. It's important to understand which services are taxable and which are not, as well as the rules and regulations that apply to them. Admissions to entertainment venues, such as recreational areas and sporting events, are taxable.
This also applies to the provision of entertainment devices, such as video games and gambling. Additionally, making available health clubs, spas, tanning facilities, reduction salons, steam baths or sports facilities is also taxable. Most professional services are not taxable. However, sales of some products may be subject to taxes.
If the service you provide includes the creation or manufacture of a product, you may have to pay sales tax on the products. If taxable and non-taxable items are shipped together, the percentage (based on the sales price or weight of the item or items in question) of the shipping costs related to the taxable items must be taxed. Books are also taxable in Minnesota, so Mary charges her customers a lump-sum sales tax of 7.625% on all sales. Expires on April 15 for all taxable purchases made during the previous calendar year if the seller did not collect local tax at the time of sale. Digital products or services are anything that is delivered electronically, such as an album downloaded from iTunes or a movie purchased on Amazon.
Total gross revenues from the sale of custom-made products are taxable, without deduction for labor costs, provided that the manufactured item remains personal property after installation. The state of Minnesota wants you to charge sales tax on shipping costs to your customers if the items you shipped are taxable. If your company buys, leases, or rents taxable goods or services used in your business, they are subject to local use tax, either with the purchase or before April 15 of the following year. In Hennepin County, in addition to a local sales tax on certain purchases made within the county, a local use tax applies to taxable purchases made outside Hennepin County by county residents and businesses. If a case is changed to a recaptured tire, the entire charge, minus the allowance for the exchange, is taxable.
