What if I don't owe any tax?
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If you have a Minnesota tax ID number but do not owe any tax for the reporting period, you still need to file a return stating that zero tax is owed.
How often do I need to file Sales and Use Tax?Back to top
Sales and Use Tax may be due on a monthly, quarterly, or annual basis. The due date is based on the average monthly tax you reported in the previous year, as shown in the table below.
||Less than $100 per month
||Feb. 5 of the following year|
||Less than $500 per month
||20th day of the month after the end of the quarter|
||More than $500 per month
||20th day of the month after the end of the month|
When a due date falls on a weekend or legal holiday, the due date is the next business day.
Why was I assessed penalty?Back to top
Penalties are assessed for different reasons. The most common penalties for Sales and Use Tax are for late filing or late payment of the tax.
If you don’t file your return on time, we’ll assess a 5 percent penalty. If you don’t pay the tax on time, we’ll assess a penalty of: 5 percent if your payment is up to 30 days late, 10 percent if it’s 31 to 60 days late, and 15 percent if it’s more than 60 days late.
Do I need to file an amended return?Back to top
If you made an error on a previously filed Sales and Use Tax return, you must file an amended return to correct the error. You may file an amended return up to 3 ½ years from the due date of the original return.
Common reasons for amending your return are:
- You did not report enough tax on your original return
- You reported too much tax on your original return
- You reported the tax on the wrong line on the return
- You incorrectly charged sales tax to a customer and have refunded the tax to them
- You received a valid exemption certificate from a customer for a sale reported in a prior period and have refunded the tax to them
Don’t file an amended return to claim:
- Bad debt loss
- Returned checks
- A refund of Sales or Use Tax that you overpaid
Why didn’t I receive a payment voucher?Back to top
The Department of Revenue sends out Sales and Use Tax payment vouchers at the beginning of the year, but not to all taxpayers. If you’re required to electronically pay any business tax to the department, you must pay all business taxes electronically. If you’ve paid electronically at any time during the last three years, you won’t receive a payment voucher.
If you’re not required to pay electronically, and you want to pay by check, create a Sales and Use Tax Return Payment Voucher. Mail the voucher with your check.
What are “gross receipts”?Back to top
“Gross receipts” are the total sales from all business operations for Minnesota during the reporting period – that is, what you report as Minnesota receipts for income tax. This total includes all taxable and nontaxable sales, leases, and rentals.
Don’t include sales tax as part of your gross receipts.
Gross receipts must be entered on every return you file. If you have no sales for the reporting period, enter zero for gross receipts.
What is “variable rate tax”?Back to top
“Variable rate tax” applies when you buy a taxable item outside Minnesota and are required to pay that state’s sales tax, but the rate is less than Minnesota’s general sales tax rate. In that situation, you must pay the difference to Minnesota as use tax.
Example: You bought some computers in Wisconsin for $3,000 and paid sales tax of 5.5 percent. That rate is lower than Minnesota’s general sales tax rate of 6.875 percent. You must pay the difference – 1.375 percent, or $41.25 in this case – as use tax to Minnesota. When filing the return , you’d enter $3,000 for the “Variable-rate Purchases Taxable Amount” and $41.25 for the “Tax Amount.”
Who needs to register for Sales and Use Tax?Back to top
You must register to collect sales tax if you make taxable retail sales in Minnesota. This includes businesses outside Minnesota who:
- have an office, distribution, sales, or sample room location; warehouse or other place of business in Minnesota, either directly or by a subsidiary
- have a representative, agent, salesperson, canvasser, or solicitor in Minnesota – on either a permanent or temporary basis – who operates under the authority of the retailer or its subsidiary for any purpose
- deliver items into Minnesota in their own vehicles
- provide taxable services in Minnesota
If you make retail sales in any cities, counties, or other local taxing areas that have a local sales tax, you must also register the local sales tax(es).
If you don’t have taxable sales in Minnesota, but you make taxable purchases, you must register to pay use tax.
For Minnesota tax purposes, “nexus” means your business has a taxable presence or sales in the state and must report and pay Minnesota taxes.
Your business has nexus in Minnesota if it has a building or facility in the state. Your business may have nexus if you or another representative of the company make sales or perform other business activities in Minnesota. For more detailed information, see Revenue Notice 00-10, Sales & Use Tax - Nexus Standards.
Unsure whether you have nexus in Minnesota? You may complete and submit Form ST101, Minnesota Business Activity Questionnaire for Determining Sales Tax Nexus. We’ll review the questionnaire and notify you if you are required to register and collect Minnesota Sales and Use Tax.
Can I file for an extension?
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There are no extensions given for Sales and Use Tax returns. If you don’t file your return on time, we’ll assess a 5 percent penalty. If you don’t pay the tax on time, we’ll assess a penalty of: 5 percent if your payment is up to 30 days late, 10 percent if it’s 31 to 60 days late, and 15 percent if it’s more than 60 days late.
For more detailed information on penalties, see I was assessed penalty and interest.
Can penalties be abated (cancelled)?Back to top
You may request that we abate (cancel) a penalty if you can show “reasonable cause” – an acceptable reason – for why your return or payment was late, or why you didn’t pay electronically when required to do so.
For more information on penalty abatements and how to apply, see:
How do I update my business information?
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If you have a Minnesota tax ID number, you can make some changes through our e-Services system. For other changes, you may have to contact our Business Registration unit.
For more information, see Update Business Information.
Use tax complements sales tax and applies when you buy, lease or rent taxable items or services and aren’t charged sales tax by the seller. Use tax is based on the cost of your taxable purchases, like sales tax (and subject to the same exemptions). You are responsible to pay use tax, when owed.