Retailers and Wholesalers
Taxable Sales
Sales and rentals of tangible personal property are taxable unless an exemption applies.
Examples of taxable sales:
For more information, see Clothing.
- Batteries
- Candy and gum
- Dietary supplements
- Equipment sales or rentals
- Jewelry and watches
- Office supplies
- Pet food
Business Inventory
Sales of taxable business inventory do not qualify for the isolated or occasional sale exemption. Business inventory is sold in the regular course of business. To sell taxable inventory exempt from sales tax, you must obtain a completed Form ST3, Certificate of Exemption from the buyer. For more information, see Isolated and Occasional Sales.Clothing
The clothing exemption applies to clothing suitable for general use. The clothing exemption does not apply to the following, which are taxable: fur clothing, clothing accessories or equipment, sports or recreational equipment, or protective equipment.Examples of taxable clothing accessories or equipment:
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Examples of taxable sport or recreational equipment:
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Examples of taxable protective equipment:
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Determining Sales Price
For sales tax purposes, sales price is the amount subject to sales tax. Sales price includes the following charges:- All items required as a condition of the sale
- Delivery or handling charges
- Fabrication labor
- Installation charges
- Layaway fees
- Retail price of the product or service
- Service charges (trip charge, fuel surcharge, processing charges, etc.)
- Taxes that are the obligation of the seller
Not Included in Sales Price
Sales price does not include the following charges:- Credit allowed for tangible personal property taken in trade (trade-in allowance)
- Discounts or coupons (see the Discounts and Coupons)
- Interest
- Finance charges
- Taxes legally imposed on the consumer, if separately stated on the invoice
Sales Tax Separately Stated
You should separately state sales tax on the customer’s invoice. If you include sales tax in the price, you must note that the item has tax included on the receipt or post a sign stating tax is included.Returns
When a customer returns a taxable item, refund the purchase price and sales tax paid on refunded items.Coupons, Discounts, Rewards, and Rebates
Calculating sales tax on the price of an item may be affected by:
- Coupons, rewards, and rebates
- Retailer discounts
- Daily deal website vouchers and coupons
For more information, see Coupons, Discounts, Rewards, Rebates, and Other Forms of Payment.
Local Sales Tax
Some cities and counties have local sales and use taxes. If you are located in or make sales into an area with a local tax, you may owe local sales and use tax. For more information, see Local Sales and Use Taxes.
To determine the sales tax rate, use the location where the product is received by the customer, typically your business or a delivery address. You can use our Sales Tax Rate Map or Sales Tax Rate Calculator to help you determine the sales tax rate.
Note: The map and rate calculator do not include special local taxes.
For more information, see:
Ticket Sales
There are two types of ticket sellers:
Example: A venue will not accept an exemption certificate from a ticket reseller and therefore sells their tickets each with a charge of $5 sales tax. The ticket reseller then sells the tickets to their customers for a higher amount that would result in $7 sales tax on each ticket. The reseller either:
- Those who facilitate the sale
- Those who purchase tickets for resale
Ticket Sellers Who Facilitate the Sale
Ticket sellers who facilitate the sale sell admission tickets to an event or place of amusement on behalf of an event organizer. They are given tickets at no charge by the event organizer and generally return any unsold tickets to the organizer. Ticket seller facilitators include:- Convenience stores
- Grocery stores
- Remote sellers
- Other retailers
Ticket Sellers Who Purchase Tickets for Resale
A ticket reseller is in the business of purchasing admission tickets for resale and must be registered to collect sales tax. (Minnesota Statute 297A.68 subd. 43). Ticket resellers must collect and remit state sales tax and all applicable local taxes on the total sales price of the admission ticket. Ticket resellers may purchase admission tickets exempt for resale by providing their vendor with a completed Form ST3, Certificate of Exemption. If the ticket reseller did not purchase tickets exempt for resale, the ticket reseller can either:- Use Form ST11, Sales and Use Tax Refund Request for a refund of sales tax paid on the original ticket price
- Pass on credit for the tax paid on the original ticket price to their customer
Credit for Tax Paid on the Original Ticket Price
If a reseller purchased the ticket from a seller that is not in the business of selling tickets, they cannot use a resale exemption certificate or file a purchaser refund claim. However, they may take the credit for the tax paid on the original ticket price when charging their customer. The ticket reseller must keep records to document the price and tax paid when they purchase a ticket and when they resell a ticket. The credit allowed for sales tax paid can never be more than the tax paid on the original ticket or the amount of tax due on the total ticket sale.1. Charges and remits the entire $7 on the tax return.
The reseller would charge and remit the total $7 collected from the customer. They would then file Form ST11 directly with the department to recover the $5 sales tax they paid to the venue.
2. Charges and remits $2 on the tax return
When charging the customer, the retailer would credit the $5 they had already paid on their purchase of the original ticket and only charge $2 to the customer. When filing the return, they would report only the $2. They must keep records of the original tax paid, tax charged to their customer and the credit taken.
When is the Event Organizer Required to Collect and Remit Sales Tax?
When event organizers directly sell tickets to and collect payments from the purchaser, they are required to collect and remit sales tax on the total sales price for the ticket, including any additional charges and fees.When is a Third Party Required to Collect and Remit Sales Tax?
When an event organizer sells tickets through a third party and the third party collects the payment, including additional charges, the third party ticket seller is responsible for collecting and remitting sales tax. However, if the event organizer collects the payment directly from the purchaser, they are responsible for collecting the sales tax.Nontaxable Sales
You do not need to charge Minnesota sales tax when you:
- Ship or deliver products to customers outside of Minnesota
- Sell items that are exempt by law
- Provide nontaxable services
Out-of-State Sales
Items shipped or delivered to a customer out of state are not taxable. You must keep records that show the items were shipped or delivered outside of Minnesota.Items Exempt by Law
When you sell an exempt item, show the item separately on the invoice. You do not have to provide any other proof why no tax was charged. Common examples include:- Clothing for general use, see Clothing
- Food (grocery items), see Food and Food Ingredients
- Prescription and over-the-counter drugs for humans, see Drugs
Note: Each of the above categories may include both taxable and nontaxable items. See the corresponding fact sheet for details.
Firearm Storage Unit Exemption
Starting July 1, 2023, secure firearm storage units are exempt from sales tax. Secure firearm storage units are fully enclosed containers that are locked by padlock, keylock, combination lock, or similar locking device that is specifically designed for safe storage of firearms or is sold for that purpose by a federally licensed firearms dealer.Nontaxable Services
Most services are not taxable. For more information, see:Form ST3, Certificate of Exemption
Sales to certain types of customers and for certain uses are not taxable. You must charge sales tax unless the customer gives you a completed Form ST3, Certificate of Exemption. You must keep the form in your records. For the form to be complete, the customer must complete these required sections:- Purchaser’s name and address
- Purchaser’s identification number
- Type of business
- Reason for exemption
- Signature
Gift Certificates and Gift Card Sales
Gift certificates and gift cards are not taxable when sold. When a gift certificate or gift card is redeemed, charge sales tax on any taxable portion of the purchase. Apply the amount of the gift certificate or card as a cash payment.Note: Your purchase of gift card or certificate stock is taxable.