List of Sales Tax Items in Minnesota

Minnesota is a popular shopping destination because clothing is exempt from sales tax.

Minnesota charges a sales tax of 6.875 percent on most taxable items. Only six states have a higher sales tax rate than Minnesota. Some popular items are exempt from sales tax in Minnesota, such as clothing, legal drugs, newspapers and unprepared food. Although Minnesota has a narrower sales tax base than most states in the region, sales tax is still charged on most goods and services.

Admission Fees

Roller coaster at amusement park
Image Credit: makluk/iStock/Getty Images

Minnesota collects sales tax on fees charged to gain admission to health clubs, golf clubs, movies, amusement parks, recreational areas, etc. Fees charged for the use of tanning facilities are also taxable.

One-time health club initiation or membership dues are taxable; however, membership dues paid to the YMCA, YWCA, or Jewish Community Centers of Minneapolis and St. Paul are exempt from sales tax.

Building Materials and Supplies

Lumber on shelves
Image Credit: Michael Blann/Digital Vision/Getty Images

Materials and supplies used to build or improve real property are taxable in Minnesota.

Cable and Satellite Television Services

Satellite dish on house
Image Credit: WendellandCarolyn/iStock/Getty Images

Minnesota collects sales tax on charges for cable, satellite and pay-per-view television.

Candy and Soft Drinks

Assorted selection of candies
Image Credit: Vadim Balantsev/iStock/Getty Images

Candy is not included in the food exemption in Minnesota. Interestingly, if flour is listed as one of the ingredients in a candy item, the item is not taxable. However, if the item is sold from a vending machine, it is taxable, regardless of whether it contains flour.

Computer Software

Man inserting dvd into computer
Image Credit: James Pauls/iStock/Getty Images

Computer software that is already written is taxable; however, custom software that is developed according to the specifications of a customer is not taxable.

Delivery Charges

Pizza gets delivered
Image Credit: Lisa F. Young/iStock/Getty Images

Sales tax is collected on delivery charges in Minnesota if the item being delivered is taxable.

Labor

Mechanic installing a new car battery
Image Credit: Joe Belanger/iStock/Getty Images

Minnesota charges sales tax on labor to produce or install taxable items. Labor to repair an item is not taxable.

Leases and Rentals of Motor Vehicles

Couple receive car keys from salesman
Image Credit: Deklofenak/iStock/Getty Images

Sales tax is charged up front for motor vehicle leases if the vehicle's gross weight is 10,000 lbs. or less, regardless of whether the vehicle is new or used or is used for business or personal use.

Machinery, Equipment, Appliances, Furniture, Etc.

Washing machines in store
Image Credit: Kostiantyn Postumitenko/iStock/Getty Images

Sales tax is charged on machinery, appliances, furniture, etc., in Minnesota on both new and used items. Sales tax paid on certain machinery and equipment may be eligible for a refund if the machinery or equipment is being used in retail manufacturing.

Prepared Food and Drinks

Bartender serving alcohol to man in suit
Image Credit: Don Mason/Blend Images/Getty Images

Food items that are prepared by the seller are taxable in Minnesota. Also, all sales made from a vending machine are taxable.

Liquor is subject to the 6.875 percent sales tax as well as a 2.5 percent gross receipts tax.

Services

SUV on tow truck
Image Credit: Thinkstock/Stockbyte/Getty Images

Most services are taxable in Minnesota, including vehicle towing and washing, security, laundry, cleaning, lawn care, landscaping, pet grooming, and parking services.

Utilities

Gas burner
Image Credit: ppart/iStock/Getty Images

Minnesota collects sales tax on utility charges, including electricity, telephone, gas and water. However, residential customers are exempt from sales tax on natural gas or electricity November through April if it is the primary heat source for the residence.

references & resources