Avalara Taxrates > Blog > Sales Tax News > Minnesota to Extend Certain Exemptions to Cities and Counties - Avalara

Minnesota to Extend Certain Exemptions to Cities and Counties


 The city of Minneapolis will be eligible for certain exemptions, effective January 2014.

Townships in Minnesota have had the privilege of purchasing certain items and services exempt from sales and use tax since October 2011. Beginning January 1, 2014, those exemptions will be extended to Minnesota cities and counties.

Exempt

The Minnesota Department of Revenue lists the following items as examples of what local governments may purchase free from sales and use tax:

  • Gravel, sand, salt, and sand/salt mixtures;
  • Lawn care, tree, bush, and stump removal services;
  • Office supplies and equipment and telephone service;
  • Machinery and equipment, accessories for public safety, and road and bridge maintenance;
  • Motor vehicles for certain uses; and
  • Fuel (when used to provide exempt services) and construction materials (for their own use).

Not exempt

The sales and use tax exemption does not apply to any of the following:

  • Purchases of lodging, prepared food, candy, soft drinks and alcoholic beverages;
  • Solid waste management tax;
  • Certain cemetery-related purchases for cities, towns and counties with a municipal cemetery (equipment, office supplies, etc). Lawn maintenance services and the like for cemeteries are exempt.
  • Purchases used to provide services generally provided by a private business, such as golf courses, marinas, campgrounds, and laundromats.

When local government purchases are used to provide both exempt and taxable services, tax should be paid on the taxable portion.

Examples may be found in the DOR's sales tax fact sheet #176. The department also provides a Local Government FAQ sheet on the issue.

How does your business track sales tax changes around the country? An automated sales tax solution saves time and money.

Get Free Tax Rate Tables

Minnesota State Rates

photo credit: evershedm via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.