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Last Updated: 6/19/2018

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Sales and Use Tax

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Sales and Use Tax > Resources > Education

  • What is use tax?Back to top

    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. 

  • What is an acceptable exemption certificate?Back to top

    If a purchaser is exempt from paying sales tax, they must provide the seller with a fully completed exemption certificate at the time of the purchase. Purchasers are responsible to know if they qualify for an exemption, and they will be held responsible for any tax, interest and penalties that apply if the purchase isn’t eligible for an exemption.

    The Minnesota Department of Revenue accepts the following forms as valid exemption certificates:

    • Form ST3, Certificate of Exemption (Minnesota Department of Revenue form)
    • Form F0003, Certificate of Exemption (Streamlined Sales Tax form)
    • Uniform Sales and Use Tax Certificate (Multistate Tax Commission form)
    • Exemption certificates from other states, if they meet the requirements below
    • Exemption certificates prepared by the purchaser, if they meet the requirements below

    An exemption certificate must contain the following information to be valid:

    • Purchaser’s name and address
    • Purchaser’s Minnesota tax ID number or if they don’t have one, any of the following:
      • Tax ID number from another state (and list the state of issue)
      • Federal employer ID number (FEIN)
      • Driver’s license (and list the state of issue) 
    • Purchaser’s type of business
    • Reason for the exemption
    • Purchaser’s signature

  • Are labor charges taxable?Back to top

    Sometimes. It may depend on the type of labor and whether it’s listed separately on an invoice. 

    Taxable labor charges include:

    • Fabrication labor – to make or create a product, or to alter an existing product.
    • Installation labor – to set an item of tangible personal property or equipment into position, or to connect, adjust or program it for use.

    Non-taxable labor charges include:

    • Construction labor – to attach an item or materials to a building or land (“real property”).
    • Repair labor – if listed separately from materials or parts on the invoice..

    For detailed information on when labor charges are taxable, see Fact Sheet 152A, Labor - Installation, Fabrication and Construction and Fact Sheet 152B, Labor - Repair for Businesses. ​

  • What services are taxable?Back to top

    • Admissions
      • Admissions to places of amusement (including recreational areas and athletic events)
      • Making available amusement devices (including video games and games of chance)
      • Making available health clubs, spas, tanning facilities, reducing salons, steam baths, or athletic facilities
      • Granting membership to a sports or athletic facility
    • Building cleaning and maintenance
    • Delivery of aggregate
    • Detective, security, and alarm services
    • Laundry, dry cleaning, and alterations services
    • Lawn, garden, tree, and bush services
    • Lodging and related services
    • Massages (not medically prescribed)
    • Motor vehicle towing, washing, waxing, rustproofing, and cleaning services
    • Parking services
    • Pet grooming, boarding, and care services
    • Telecommunication services
    Within each of these broad categories there are some activities that are not taxed.
    See our sales tax fact sheets and industry guides for more information.