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How Sales Tax Applies to Minnesota Local Governments


 Local governments in Minnesota may purchase certain goods and services tax-free.

Updated, 10.21.2014

Local governments in Minnesota may purchase certain goods and services tax-free. Effective July 1, 2014, the list of goods eligible for the exemption has been expanded. In addition, as of July 1, the definition of "local governments" is expanded to include "statutory or home rule charter cities, counties, townships, and qualifying cooperative agreements."

Exempt purchases

Purchases made to provide the following types of services qualify for the local government sales tax exemption:

  • Administration of housing programs;
  • Ambulance and public safety services;
  • Aquatic facilities;
  • Cemeteries;
  • Chore and homemaking services for elderly or disabled residents;
  • Correctional services;
  • Farmers markets;
  • Health and fitness centers;
  • Housing facilities;
  • Ice arenas;
  • Licensing services;
  • Local festivals and fairs;
  • Public use / municipal airports;
  • Public transit;
  • Recreational and athletic facilities;
  • Road and street maintenance and lighting;
  • Sewer and water services; and
  • Wastewater treatment services.

Additional information, including a list of taxable purchases, is available on Minnesota Department of Revenue Fact Sheet 176.

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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.