Minnesota Sales and Use Tax Recap
- Sales Tax News
- Feb 18, 2015 | Gail Cole
The Minnesota Department of Revenue has created an overview of recent changes to sales and use tax. It also highlights Minnesota sales and use tax exemptions, and special rates.
History at a glance
A brief history of sales and use tax changes includes the following pivotal events:
- 1994: State rate increases to 6.5%.
- 1997: An exemption for replacement of capital equipment is enacted.
- 2001: Streamlined Sales Tax provisions are adopted.
- 2003: Additional Streamlined Sales Tax provisions are adopted.
- 2005: Medicine exemption is expanded to include nonprescription drugs.
- 2008: State adopts constitutional amendment to increase the state tax rate by 0.375%; proceeds are dedicated to four specific funds.
- 2009: State sales tax rate increases to 6.875%.
- 2013: Many but not all purchases by cities and counties are exempted from sales tax. Sales tax is imposed on business purchases of equipment repair, maintenance services, and warehousing and storage services. Sales tax is imposed on digital products.
- 2014: Business purchases of equipment repair and maintenance services and warehousing and storage services are exempted from sales tax.
- Clothing (with the exception of accessories, fur clothing, and sports and protective clothing and equipment)
- Drugs for human use
- Durable medical equipment for home use, mobility enhancing equipment, and prosthetic devices
- Farm machinery and certain capital equipment
- Food products (with the exception of prepared food, candy, dietary supplements and soft drinks)
- Fuels taxed under the motor fuels excise tax
- Residential heating fuels and water services
In addition to the state rate of 6.875%, additional taxes apply to the following:
- Short-term car rentals: an additional 9.2% tax and a 5% fee
- Liquor sales: an additional 2.5% gross receipts tax
Additional information is available on the Minnesota Department of Revenue sales and use tax overview.
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