Warehouse and Storage Services (April 1, 2014)
Starting April 1, 2014, business-related warehousing and storage services will be taxable in Minnesota. This means state sales and use tax is due when a business buys warehouse or storage services for its tangible personal property, except as noted below.
“Tangible” refers to property that can be seen, weighted, measured, felt or touched. The tax does not apply to digital storage services.
The following items and warehouse or storage services are exempt from the tax:
- Warehousing and storage of agricultural products, electronic data, and refrigerated storage.
“Agricultural products” includes those produced on a farm, such as grain or animal products.
- Warehouse and storage services provided by a parent company or affiliated group.
For example, no tax is due on the storage fee charged when a company stores its inventory in its own warehouse, separate from its production facility.
- Self-storage services that the purchaser cannot deduct as a business expense on its federal corporate or income tax return.
- “Self-storage services” includes:
- Purchase or rental of secure areas, rooms, units, or compartments where the property owner retains the custody and care of the items being stored, and controls the storage and removal of them.
- Storage of motor vehicles, recreational vehicles, and boats (as long as the storage fee cannot be deducted as a business expense).
- Self-storage services does not include the rental of an entire warehouse, or storage where the service provider’s staff handles storage and removal of the items.
The department will provide more information later this year about how we’ll implement the sales tax on business warehouse and storage services.
For the latest information on this year’s tax changes: