This FAQ is for Minnesota businesses that are required to collect sales tax from buyers and pay that sales tax into the state. For greater details, see our Minnesota Sales Tax Guide and Minnesota Use Tax Guide.
A question not covered by this FAQ: Do I have to collect sales tax from buyers of my goods or services?
Whether you are required to collect sales tax is a difficult question beyond the scope of this FAQ. The answer may be obvious for some businesses; for example, most photographers and candy retailers must collect sales tax. The issue is more difficult for other businesses; for example, although many services are not subject to sales tax, a health club must collect sales tax for membership services.
You should consult with an attorney or CPA to determine whether you must collect sales tax for the goods or services you sell.
Question: What is sales tax?
Answer: Here is an overview of sales tax law in Minnesota.
Question: Do I use the sales tax rate where the seller is located or at the buyer’s location?
Answer: In Minnesota, the sales tax rate is based on the location where the goods or services are delivered. For example, if a buyer picks up goods at the seller’s location, the seller’s location is used to determine the sales tax rate. If a seller mails goods to a buyer, the sales tax rate is based on the buyer’s location.
Question: Do I really have to figure out the exact sales tax rate for each location I mail orders to?
Answer: Yes. See Summary of the Local Sales Tax Provisions in Minnesota.
Question: How do I figure out the sales tax rate for the destination I am mailing an order to?
Answer: In Minnesota, you can use this Sales Tax Rate Calculator provided by the State of Minnesota. This will help you figure out the state and local sales tax rates.
Question: When I collect sales tax money, how often must I send it into the state government?
Answer: Some businesses must send sales tax into the state monthly, some must pay quarterly, and some must pay annually. The frequency depends on the amount of sales tax you are collecting. The more sales tax you collect, the more often you must pay the money into the state.
|Filing Frequency||Average Tax Reported||Due Date|
|Annual||Less than $100 per month||Feb. 5 of the following year|
|Quarterly||Less than $500 per month||20th day of the month after the end of the quarter|
|Monthly||More than $500 per month||20th day of the month after the end of the month|
Question: What are the Minnesota sales tax filing deadlines?
- Monthly filers – 20th day of the following month
- Quarterly filers – April 20, July 20, October 20 and January 20 of the following year
- Annual filers – February 5 of the following year
If your deadline is on a weekend or legal holiday, your sales tax return is due on the next business day.
Question: After I collect sales tax from buyers, how do I pay this money into the state?
Answer: The State of Minnesota provides instructions for companies collecting sales tax to pay the tax into the state . Learn how to file a Minnesota sales tax return. Keep in mind that you will need a Minnesota tax ID first.
Question: What if I failed to pay in sales tax by the deadline?
Answer: You will likely be subject to a penalty and interest, but Minnesota may give you a break if you have a good reason for the late payment. To learn more about abating the penalty, read about “penalty abatement” on the Minnesota Department of Revenue’s website.
Question: Where can I learn more about paying sales tax I collect from buyers of my products or services?
Answer: Minnesota’s Sales and Use Tax website is a great place to start. If you have detailed questions and want more than a summary overview, the Minnesota Sales and Use Tax Instruction Booklet is a comprehensive guide to collecting and paying Minnesota sales tax.