Minnesota Sales and Use Tax for Businesses

What Is Taxable Under Minnesota Sales Tax?

Minnesota taxes retail sales of tangible goods, prewritten software, digital products, and a defined list of services. Minn. Stat. § 297A.62, subd. 1 provides that “a sales tax of 6.5 percent is imposed on the gross receipts from retail sales.” Subdivision 1a adds “an additional sales tax of 0.375 percent” and provides: “This additional tax expires July 1, 2034.” Under subdivision 4, “the rate to be applied is the combined rate under subdivisions 1 and 1a until the additional tax imposed by subdivision 1a expires.” That puts the state rate at 6.875% today.

Goods are taxed as tangible personal property, which Minn. Stat. § 297A.61, subd. 10 defines as “personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses.” A retail sale under subdivision 4 is “any sale, lease, or rental of tangible personal property for any purpose, other than resale, sublease, or subrent of items by the purchaser in the normal course of business as defined in subdivision 21.” Subdivision 3 adds software and digital goods: “A sale and a purchase includes the transfer for a consideration of prewritten computer software whether delivered electronically, by load and leave, or otherwise.” It also reaches “furnishing for a consideration of specified digital products or other digital products.” For the line between taxable software and a subscription service, see my page on how Minnesota taxes software and SaaS.

Services are different. Under subdivision 4, a service is a retail sale only when it is “any sale of a service enumerated in subdivision 3, for any purpose other than resale by the purchaser in the normal course of business as defined in subdivision 21.” The enumerated services include:

• admissions to places of amusement, recreation areas, and athletic events, and athletic club memberships;
• lodging and nonresidential parking;
• laundry and dry cleaning, and motor vehicle washing and towing;
• “building and residential cleaning, maintenance, and disinfecting services and pest control and exterminating services”;
• detective, security, burglar alarm, and fire alarm services;
• pet grooming, animal boarding, lawn care, and tree services;
• massages, except those connected to licensed health care.

Consulting, accounting, and legal services are not on that list. A taxable product sold with a service can still make the sale taxable: under subdivision 4, “A sale of a bundled transaction in which one or more of the products included in the bundle is a taxable product is a retail sale,” with listed exceptions. Subdivision 38 reaches products “sold for one nonitemized price,” and a price “separately identified by product” on the invoice or other sales documents given to the customer is not one nonitemized price. Subdivision 3 also provides: “Services performed by an employee for an employer are not taxable.” It adds: “Services performed between members of an affiliated group of corporations are not taxable,” and services between partnerships or associations are not taxable “if one of the entities owns or controls more than 80 percent of the voting power of the equity interest in the other entity.” For the corporate exclusion, “affiliated group of corporations” means “those entities that would be classified as members of an affiliated group as defined under United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).” Under 26 U.S.C. § 1504(a), the members must be connected “through stock ownership with a common parent corporation,” and the stock in each member other than the common parent must be “owned directly by 1 or more of the other includible corporations,” with “at least 80 percent of the total voting power” and “a value equal to at least 80 percent of the total value” of that member’s stock.

On the exempt side, Minn. Stat. § 297A.67, subd. 8 provides: “Clothing is exempt.” The exemption covers “all human wearing apparel suitable for general use,” and subdivision 8 excludes items including “clothing accessories or equipment,” “sports or recreational equipment,” “protective equipment,” and “fur clothing”. Subdivision 2 exempts food and food ingredients, but “Food and food ingredients exempt under this subdivision do not include candy, soft drinks, dietary supplements, and prepared foods.” It also provides: “Food and food ingredients do not include alcoholic beverages, tobacco, taxable cannabis products, medical cannabis flower, and medical cannabinoid products.”

When Does a Business Have to Register for Minnesota Sales Tax?

A business must apply for a sales tax permit whenever Minn. Stat. § 297A.66 requires it to collect Minnesota tax. Minn. Stat. § 297A.83, subd. 1 provides: “A retailer required to collect and remit sales taxes under section 297A.66 shall file with the commissioner an application for a permit.” The Department’s registration guide tells a business to register for a Minnesota Tax ID Number and a Sales and Use Tax account before its first taxable sale in Minnesota. A remote seller’s start date follows § 297A.66, subd. 2, covered in the out-of-state seller section below.

A Minnesota place of business creates the duty to collect on Minnesota sales, other than sales facilitated by a marketplace provider that “is required to collect and remit sales and use taxes” (covered in the out-of-state seller section below). Under Minn. Stat. § 297A.66, subd. 1, a place of business includes an office, warehouse, or sales room held “directly or by a subsidiary or an affiliate,” “including the employment of a resident of this state who works from a home office in this state.” Subdivision 4 defines which related companies count as an “affiliate” of the retailer for this place-of-business test. A company headquartered elsewhere can therefore owe the collection duty because of one Minnesota employee working from home. Sales agents and other representatives operating in Minnesota for the seller count too.

At sign-up, the Department asks for your expected filing schedule (monthly, quarterly, or annual), your accounting method (cash or accrual), and any local taxes that apply to your business. A business that makes no taxable sales but buys taxable items without paying tax may still need an account. Under § 297A.83, subd. 1, the commissioner may require a business that must file use tax returns under Minn. Stat. § 289A.11, subd. 3 to apply for a permit. For the registration form itself, see my page on Minnesota sales tax registration.

When Must an Out-of-State Seller Collect Minnesota Sales Tax?

A seller with no Minnesota place of business must collect Minnesota tax once its sales into Minnesota cross either of two thresholds over the prior 12 months. The seller must also solicit Minnesota customers, which under Minn. Stat. § 297A.66, subd. 1 includes solicitation by any communication system, “including but not limited to a website accessible from within Minnesota.” The two thresholds are that the seller:

1. “makes or facilitates 200 or more retail sales from outside this state to destinations in this state during the prior 12-month period”; or
2. “makes or facilitates retail sales totaling more than $100,000 from outside this state to destinations in this state during the prior 12-month period”.

The federal backdrop for these thresholds is South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018). Section 297A.66, subd. 1 applies them only “To the extent allowed by the United States Constitution and the laws of the United States”. South Dakota’s law reached sellers with more than $100,000 of deliveries or 200 or more transactions into that state each year. Reviewing it, the U.S. Supreme Court concluded “that the physical presence rule of Quill is unsound and incorrect” and overruled its earlier decisions requiring a seller’s physical presence. The Court found South Dakota’s nexus “clearly sufficient” and sent any remaining Commerce Clause claims back to the state courts. For how this plays out in other states, see my page on economic nexus.

Collection starts on a schedule. Under Minn. Stat. § 297A.66, subd. 2, a remote seller must “begin collecting and remitting sales and use taxes to the commissioner on the first day of a calendar month occurring no later than 60 days after the retailer or marketplace provider engages in regular or systematic soliciting of sales from potential customers in this state.” Once it starts, the seller must “continue to collect and remit sales and use taxes to the commissioner until at least the last day of the 12th calendar month following the calendar month in which the retailer or marketplace provider began collecting and remitting sales and use taxes under clause (1).” It may stop “only after notifying the commissioner” that it no longer solicits at the threshold level. Check the current text of § 297A.66 before relying on these periods.

Sales through a marketplace follow a separate rule. Under subdivision 3, “A marketplace provider is deemed the retailer or seller for all retail sales it facilitates, and is subject to audit on the retail sales it facilitates if it is required to collect sales and use taxes and remit them to the commissioner under subdivision 2, paragraphs (b) and (c).” The marketplace collects on those sales unless the seller gives it a copy of the seller’s Minnesota registration and both agree the seller will collect, under subdivision 2.

How Does Collecting and Remitting Minnesota Sales Tax Work?

You add the tax to each taxable sale, collect it from the customer, and pay it to the Department on a regular return. Minn. Stat. § 297A.77, subd. 1 provides: “The tax must be stated and charged separately from the sales price insofar as practicable and must be collected by the seller from the purchaser.” Subdivision 3 provides: “The tax collected by a retailer under this section must be remitted to the commissioner as provided in chapter 289A and this chapter.” Under Minn. Stat. § 289A.20, subd. 4, “A vendor having a liability of $250,000 or more during a fiscal year ending June 30” must pay part of its estimated June liability two business days before June 30, and a vendor with a liability of “$10,000 or more” during a fiscal year “must remit by electronic means”.

The tax is figured on the full sales price. Minn. Stat. § 297A.61, subd. 7 measures the price “without any deduction for the following,” and the list that follows includes the seller’s own costs, delivery charges, and installation charges. Subdivision 7 leaves out of the sales price “discounts, including cash, terms, or coupons, that are not reimbursed by a third party and that are allowed by the seller and taken by a purchaser on a sale” and “interest, financing, and carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser.” A delivery fee on a taxable item is taxable along with the item.

Returns follow a monthly default. Minn. Stat. § 289A.18, subd. 4 provides: “Sales and use tax returns must be filed on or before the 20th day of the month following the close of the preceding reporting period.” Annual returns are the exception, with their own date covered in the use tax section below. A retailer with a small, steady liability and a clean filing record can ask to file quarterly or annually under the same subdivision. Minn. Stat. § 297A.77, subd. 5 requires “Every person liable for any tax imposed by this chapter, or for the collection thereof” to “keep such records, render such statements, make such returns, and comply with such rules, as the commissioner may from time to time prescribe.”

Late payment costs money quickly. Under Minn. Stat. § 289A.60, subd. 1, for sales or use tax, “The penalty is five percent of the tax not paid on or before the date specified for payment of the tax if the failure is for not more than 30 days, with an additional penalty of five percent of the amount of tax remaining unpaid during each additional 30 days or fraction of 30 days during which the failure continues, not exceeding 15 percent in the aggregate.” A late return adds a separate charge under subdivision 2: “a penalty of five percent of the amount of tax not paid by the end of that period is added to the tax.” You can ask the Department to remove a penalty, and the audit section explains the grounds and the deadline. Check the current text of § 289A.60 before relying on these periods. For how that request works, see my page on sales tax penalty abatement.

Local taxes ride on top of the state rate. Under Minn. Stat. § 297A.99, subd. 4, a local sales tax “applies to sales taxable under this chapter that occur within the political subdivision.” Paragraph (b) provides: “Taxable goods or services are subject to a political subdivision’s sales tax, if they are sourced to the political subdivision pursuant to section 297A.668.” Under Minn. Stat. § 297A.668, subd. 2, when the item is not received at the seller’s business location, “the sale is sourced to the location where receipt by the purchaser or the donee designated by the purchaser occurs”. Subdivision 9 of § 297A.99 provides: “All taxes under this section are subject to the same penalties, interest, and enforcement provisions as apply to the state sales and use tax.” The Department’s local sales tax page lets you find the rate for an address or nine-digit ZIP code.

How Do Exemption Certificates Protect a Minnesota Seller?

An exemption certificate shifts the risk of a nontaxable sale off the seller, if the seller collects it on time. Minn. Stat. § 297A.665 presumes that “all gross receipts are subject to the tax” and provides: “The burden of proving that a sale is not a taxable retail sale is on the seller.” A sale for resale, or to an exempt buyer, is taxed in an audit unless you can prove the exemption.

The certificate’s required contents are set by Minn. Stat. § 297A.72. Minn. Stat. § 297A.665 relieves a seller of liability if “the seller obtains a fully completed exemption certificate or all the relevant information required by section 297A.72, subdivision 2, at the time of the sale or within 90 days after the date of the sale.” A seller that missed that window gets a second chance when the Department asks. Under § 297A.665, the seller must then act “within 120 days after a request for substantiation by the commissioner,” either by getting a good-faith certificate from the buyer or by proving another way that the sale was not taxable. Check the current text of § 297A.665 before relying on these periods.

The protection has limits. It does not cover a seller that “fraudulently fails to collect the tax” or that “solicits purchasers to participate in the unlawful claim of an exemption.” For a certificate obtained after the Department’s request, relief is also lost if the Department finds “that at the time the information was provided the seller had knowledge or had reason to know that the information relating to the exemption was materially false” or “that the seller knowingly participated in activity intended to purposefully evade the sales tax due on the transaction.” A contractor buying building materials cannot use a resale certificate for them: under Minn. Stat. § 297A.61, subd. 4, “A sale of building materials, supplies, and equipment to owners, contractors, subcontractors, or builders for the erection of buildings or the alteration, repair, or improvement of real property is a retail sale in whatever quantity sold, whether the sale is for purposes of resale in the form of real property or otherwise.”

Under Minn. Stat. § 297A.72, subd. 2, “An exemption certificate must be substantially in the form prescribed by the commissioner,” and subdivision 3 provides: “A blanket exemption certificate is an exemption certificate used for continuing future purchases.” I suggest keeping a current blanket certificate on file for each repeat exempt customer, because one certificate then covers that customer’s continuing future purchases. For the form line by line, see my page on Form ST3, Minnesota’s exemption certificate.

When Does a Business Owe Minnesota Use Tax on Its Own Purchases?

Your business owes use tax when it uses a taxable item or service in Minnesota and did not pay Minnesota sales tax on it. Sales or use tax paid to another state is credited against it. Minn. Stat. § 297A.63, subd. 1 provides: “For the privilege of using, storing, distributing, or consuming in Minnesota tangible personal property or taxable services purchased for use, storage, distribution, or consumption in this state, a use tax is imposed on a person in Minnesota.” The rate is the sales tax rate, and “No tax is imposed under paragraph (a) if the tax imposed by section 297A.62 was paid on the sales price of the tangible personal property or taxable services.” Tax paid to another state reduces use tax to the rate difference under Minn. Stat. § 297A.80, which provides: “If the tax imposed in the other state or any subdivision thereof is equal to or greater than the tax imposed in this state, then no tax is due from that person under section 297A.63.”

The Department’s purchases and use tax guide names common situations that create use tax:

• buying taxable items or services online without paying sales tax;
• taking an item out of inventory to use, donate, or give away instead of selling it;
• buying taxable items outside Minnesota, with credit under § 297A.80 for sales or use tax paid to the other state;
• buying in a Minnesota city or county with a lower local tax, or none.

The buyer files the return. Under Minn. Stat. § 289A.11, subd. 3, “For the purposes of the use tax, a return must be filed by a retailer required to collect the tax and by a person buying any items, the storage, use or other consumption of which is subject to the use tax, who has not paid the use tax to a retailer required to collect the tax.” A business with a sales tax permit reports use tax on its regular return. Subdivision 1 lets “a person who is not required to hold a sales tax permit under chapter 297A and who makes annual purchases, for use in a trade or business, of less than $18,500,” file once a year. If that business must obtain a permit or makes business purchases subject to use tax over $18,500 during the calendar year, “the reporting period must be considered ended at the end of the month in which the permit is applied for or the purchase in excess of $18,500 is made and a return must be filed for the preceding reporting period.” Those annual filers have their own date in § 289A.18, subd. 4: “Annual use tax returns of businesses, including sole proprietorships, and annual sales tax returns must be filed by February 5 following the close of the calendar year.”

Manufacturers have two large exemptions. Under Minn. Stat. § 297A.68, subd. 2, “Materials stored, used, or consumed in industrial production of tangible personal property intended to be sold ultimately at retail, are exempt, whether or not the item so used becomes an ingredient or constituent part of the property produced.” Subdivision 5 provides: “Capital equipment is exempt.” Capital equipment means “machinery and equipment purchased or leased, and used in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, or refining tangible personal property to be sold ultimately at retail if the machinery and equipment are essential to the integrated production process of manufacturing, fabricating, mining, or refining.” Office equipment does not qualify, because the exclusions include machinery or equipment used for “support operations or administration”. Subdivision 5’s exclusions also cover, among others, “motor vehicles taxed under chapter 297B,” “machinery or equipment used to receive or store raw materials,” “machinery or equipment purchased and installed by a contractor as part of an improvement to real property,” and “machinery and equipment used by restaurants in the furnishing, preparing, or serving of prepared foods”. They also exclude equipment used to furnish some of the taxable services that § 297A.61, subdivision 3, lists.

What Happens in a Minnesota Sales Tax Audit?

A sales tax audit tests your receipts against the presumption that every sale is taxable and your purchases for unpaid use tax. Under Minn. Stat. § 297A.665, the seller bears the burden of proving that a sale is not a taxable retail sale. A seller asked to substantiate exemptions has a set time to answer: the seller must act “within 120 days after a request for substantiation by the commissioner,” and if it does not, “then the exemptions claimed by the seller that required substantiation are disallowed.” Check the current text of the statute before relying on this period.

How far back the Department can go depends on what was filed. Minn. Stat. § 289A.38, subd. 1 provides: “Except as otherwise provided in this section, the amount of taxes assessable must be assessed within 3-1/2 years after the date the return is filed.” Under subdivision 5, “the tax may be assessed at any time if a false or fraudulent return is filed or when a taxpayer fails to file a return.” Subdivision 6 provides that “Additional taxes may be assessed within 6-1/2 years after the due date of the return or the date the return was filed, whichever is later,” when, among other listed conditions, the taxpayer “omits from a sales, use, or withholding tax return, or a return for a tax imposed under section 295.52, an amount of taxes in excess of 25 percent of the taxes reported in the return”. Check the current text of § 289A.38 before relying on these periods. A business that never registered has no return on file, so subdivision 5 leaves those periods open. For a seller with no Minnesota place of business, Minn. Stat. § 289A.31, subd. 7 provides that “A retailer who does not maintain a place of business within this state as defined by section 297A.66, subdivision 1, shall not be indebted to Minnesota for amounts of tax that it was required to collect but did not collect unless the retailer knew or had been advised by the commissioner of its obligation to collect the tax.”

When the audit ends with an order, you can pay, ask the Department to remove penalties, or contest the tax. Under Minn. Stat. § 270C.34, the commissioner may abate a penalty for late payment or late filing when the failure “is due to reasonable cause,” among other grounds, and subdivision 2 provides that the request “must be filed with the commissioner within 60 days of the notice date of the penalty or additional tax charge.” Check the current text of § 270C.34 before relying on this period. Under Minn. Stat. § 270C.33, subd. 9, a taxpayer may also sign “a written consent to a change in tax liability that waives the requirement of any additional notice and all rights to an administrative appeal and appeal to Tax Court concerning the assessment and collection of any part or all of the tax liability.” I suggest deciding whether to contest any part of the tax before signing a consent, because the consent waives both appeals.

A taxpayer contesting the order can start with the Department. Minn. Stat. § 270C.35, subd. 1 provides: “A taxpayer may obtain reconsideration by the commissioner of an order assessing tax, a denial of a request for abatement of penalty or interest imposed by a law administered by the commissioner, or a denial of a claim for refund by filing an administrative appeal under subdivision 4.” Subdivision 4 provides: “Within 60 days after the notice date, the taxpayer must file a written appeal with the commissioner.” Subdivision 5 provides: “When requested in writing and within the time allowed for filing an administrative appeal, the commissioner may extend the time for filing an appeal for a period not more than 30 days from the expiration of the 60 days from the notice date.” Check the current text of § 270C.35 before relying on these periods. Under subdivision 8, the order that follows the appeal “is appealable to the Minnesota Tax Court under section 271.06.”

You can also skip the administrative appeal and go straight to the Tax Court. Under Minn. Stat. § 271.06, subd. 1, “an appeal to the Tax Court may be taken, in the manner herein provided, from any official order of the commissioner of revenue respecting any tax”. Subdivision 2 provides that “within 60 days after the notice date of an order of the commissioner of revenue, the appellant, or the appellant’s attorney, shall serve a notice of appeal upon the commissioner and file the original, with proof of such service, with the Tax Court administrator”. The same subdivision provides “that the Tax Court, for cause shown, may by written order extend the time for appealing for an additional period not exceeding 30 days.” Check the current text of § 271.06 before relying on these periods. A taxpayer may file both appeals for the same order. Under § 270C.35, subd. 11, “the administrative appeal is dismissed” in that case. For records to gather before the first request, see my page on preparing for a state tax audit.

Why Can Unpaid Sales Tax Become an Owner’s Personal Debt?

Sales tax that a business collected or should have collected can become the personal debt of the people who controlled its payment. Minn. Stat. § 270C.56, subd. 1 reaches “A person who, either singly or jointly with others, has the control of, supervision of, or responsibility for filing returns or reports, paying taxes, or collecting or withholding and remitting taxes and who fails to do so.” That person “is liable for the payment of taxes arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 290.036, 290.92, and 297E.02, and the applicable penalties and interest on those taxes.” Chapter 297A is the sales and use tax chapter, so an owner or officer who had that control can be assessed personally for tax the company owed.

The statute defines “person” broadly. Under subdivision 2, the term includes “an officer or director of a corporation, a member of a partnership, an employee,” and others. A bookkeeper with authority over payments can be assessed alongside an owner. A person who pays more than a fair share has recourse: under subdivision 4, “A person who has paid all or part of a liability assessed under this section has a cause of action against other liable persons to recover the amount paid in excess of that person’s share of the liability.” Subdivision 4 also provides that “A claim for recovery of contribution may be made only in a proceeding which is separate from, and cannot be joined or consolidated with, an administrative or judicial proceeding or investigation involving the commissioner’s administration or enforcement of this section,” and that “An action for contribution arises when the liability under this section is paid in full, or the liability of the person seeking contribution has been determined by agreement between the commissioner and such person and paid, and must be brought within the time period prescribed in section 541.05.” Minn. Stat. § 541.05, subd. 1 provides that listed actions “shall be commenced within six years,” among them an action “upon a liability created by statute, other than those arising upon a penalty or forfeiture or where a shorter period is provided by section 541.07”. Check the current text of § 270C.56 and § 541.05 before relying on this period.

Unpaid sales tax can also block a new sales tax permit. Under Minn. Stat. § 297A.84, subd. 3, “the commissioner must not issue a permit to an applicant if the applicant is liable for delinquent sales tax.” Under subdivision 1, an applicant “means an individual, corporation, or partnership,” and “Applicant also includes any officer of a corporation or member of a partnership.” Subdivision 3 carves out an open appeal: “The commissioner must issue a permit to an applicant if an appeal period of an order assessing sales tax under section 270C.33, subdivision 5, has not ended.”

How Does Sales Tax Apply When a Business Is Bought or Sold?

The sale of a business’s own equipment and furnishings is exempt from sales tax when it meets one of the statute’s conditions, and a buyer can become liable for the seller’s unpaid tax. Minn. Stat. § 297A.68, subd. 25 provides that “The sale of tangible personal property primarily used in a trade or business is exempt if the sale is not made in the normal course of business of selling that kind of property and if one of the following conditions is satisfied”. One listed condition is that “the sale is a sale of substantially all of the assets of a trade or business”. Subdivision 25 requires the asset sale to “occur as a single transaction or a series of related transactions.” Those sales must fall “within the 12-month period beginning on the date of the first sale of assets intended to qualify for the exemption.” Check the current text of § 297A.68 before relying on this period. The general occasional-sale exemption does not cover business property: Minn. Stat. § 297A.67, subd. 23 provides: “This exemption does not apply to sales of tangible personal property primarily used in a trade or business.” For the other conditions, see my page on isolated and occasional sales.

On the buyer’s side, Minn. Stat. § 270C.57, subd. 1 provides: “For purposes of this section, “tax” means sales, withholding, and any tax imposed by chapter 296A.” Subdivision 2 sets a notice step when the Department has already filed a tax lien: “Whenever a business transfers in bulk to a successor the business assets, and an enforceable lien for unpaid taxes has been filed against the business by the commissioner under section 270C.63, at least 20 days before taking possession of the assets or paying the purchase price, the successor shall notify the commissioner of the transfer and the terms and conditions related to it.” Once the parties have signed a transfer agreement, “this notice requirement only applies: (1) if a lien described under this paragraph has been filed prior to the date of the agreement; or (2) if the date of the transfer is more than 30 days after the date of the agreement, and a lien described under this paragraph is filed at least 30 days prior to the date of transfer.” Check the current text of § 270C.57 before relying on these periods. Skipping that notice is costly: “If the successor fails to give the notice required in paragraph (a), the successor is liable for any unpaid taxes, interest, and penalties due from the transferring business to the extent of the purchase price.” Subdivision 2 replaces that limit for some transfers: “If, based upon the information available, the commissioner determines that a transfer was not at arm’s length or was a gift, the successor’s liability under this section equals the value of the assets transferred.”

Giving notice does not end the inquiry. If, “within 20 days after receipt of the notice, the commissioner notifies the successor that tax liabilities exist in addition to those included on the lien” (or that returns are due but unfiled), the buyer is also liable for those uncontested amounts, to the extent of the purchase price, “if the successor pays the purchase price or takes possession of the assets without withholding and remitting the liability to the commissioner.” Check the current text of § 270C.57 before relying on this period. I suggest a buyer search for Department tax liens on the seller before signing and again before closing, because the notice duty turns on whether and when a lien has been filed. For the buyer’s other inherited risks, see my page on successor liability in asset sales.

Minnesota Sales and Use Tax Compliance

A Minnesota business selling taxable goods or services needs a permit before its first taxable sale. It then collects and remits the tax on each taxable sale and pays use tax on taxable purchases made without Minnesota tax, with credit for sales or use tax paid to another state. Fully completed exemption certificates from exempt buyers protect the sales you do not tax. The owners and officers who control tax payments carry personal exposure if the business falls behind. For related tax questions, see my Minnesota tax law page.

If your business has a sales tax question or an audit notice, email [email protected] with a brief description, and I can start an intake and conflict check before you send any confidential documents.