As an e-commerce seller, you will need to collect sales tax in Minnesota if you have:
(1) retail sales of more than $100,000 or 200 or more separate retail transactions in any 12 consecutive months (economic nexus), or
(2) physical presence in Minnesota (physical nexus).
Below, we will highlight some of the basic provisions of Minnesota sales tax law.
What is the tax rate range for Minnesota?
State: Minnesota’s general sales tax rate is 6.875%.
Local: Minnesota localities impose their own sales tax at rates ranging from 0% to 2%. Minnesota Sales Tax Rate Calculator
Do you have physical or economic nexus in Minnesota?
Physical nexus. Certain business activities create physical nexus in Minnesota. If you have physical nexus, you are required to collect and remit sales tax on all sales that are shipped to Minnesota. Examples of business activities that can create physical nexus in Minnesota include:
- maintaining an office, place of distribution, sales, storage, or sample room or place, warehouse, or other place of business, including the employment of a resident of Minnesota who works from a home office in Minnesota; or
- having a representative, including, but not limited to, an affiliate, agent, salesperson, canvasser, solicitor, or other third party operating in Minnesota for the purpose of:
- repairing, selling, delivering, installing, facilitating sales, processing sales
- soliciting of orders for the retailer's or a retailer's goods or services
- leasing of tangible personal property located in Minnesota
Economic nexus. Remote sellers and marketplace facilitators that have retail sales of more than $100,000 or 200 or more separate retail transactions in any 12 consecutive months must collect and remit Minnesota sales and use tax on taxable sales. Additional information:
- Retail sales does not include sales where the purchaser is buying for resale
- Retail sales includes sales made through any marketplace, your own website, and through other sources
- Remote sellers and marketplace facilitators must register, collect, and remit Minnesota sales tax on the first day of a calendar month that occurs no later than 60 days after you exceed the threshold
What are examples of sales of taxable items?
- Tangible personal property, unless an exemption applies
- Certain services
- Certain digital goods
- Leases and rentals of tangible personal property
What are examples of sales of nontaxable/exempt items?
- Food (except candy, dietary supplements, soft drinks, and prepared food)
- Over-the-counter and prescription drugs
- Agricultural items
- Software as a service (SaaS)
Are there any sales tax holidays?
Currently, Minnesota does not have any sales tax holidays.
Is Minnesota a member of the SST (Streamlined Sales Tax)?
Currently, Minnesota is a full member of the Streamlined Sales Tax Governing Board (SSTGB).
How to get a sales tax permit / links to register in Minnesota?
You can register online at:
Minnesota Sales Tax Rate Calculator
Minnesota Taxes and Rates