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Last Updated: 7/12/2017

2017 Sales and Use Tax Law Changes

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Sales and Use Tax

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Exemptions

Air Flight Equipment

The following changes to the Air Flight Equipment Exemption take effect January 1, 2018:

  • The exemption will apply to all qualifying aircraft.

  • Aircraft must have a maximum takeoff weight of 30,000 pounds or more to qualify.

  • The number or frequency of flights will no longer matter, allowing aircraft that are used intermittently or on irregularly timed flights to qualify.

Bullion

Starting July 1, 2017, sales of precious metal bullion are exempt from sales tax. Precious metal bullion is bars or rounds that consist of at least 99.9% by weight of either gold, silver, platinum, or palladium, and are marked with weight, purity and content.

The difference between coins and rounds:

  • Coins are minted by sovereign governments, are legal tender and have a minimum face value.

  • Rounds are minted by private companies, are not legal tender and do not have a face value.

Sales of coins, jewelry, works of art, and scrap metal do not qualify for this exemption.

Construction Exemptions

The following construction exemptions were added:

  • Duluth Heritage Sports Center ice rink or ice arena operation for youth and high school programs.

  • Melrose properties destroyed by fire.

  • Madelia properties destroyed by fire.

  • Nonprofit Economic Development Corporation retail development, located in a city where the closest grocery store is at least 20 miles away.

  • Plymouth ice arena or other city-owned facilities, retroactive exemption.

Jukebox Music

Starting July 1, 2017, purchases of music by the jukebox operator for use in a jukebox and used exclusively in the jukebox is exempt.

Minnesota State High School League

Starting July 1, 2017, admissions to any game, event, or activity sponsored by the Minnesota State High School League will be exempt from sales tax, effective through June 30, 2027.

Nonprofits

Starting July 1, 2017, certain exemptions for nonprofits have changed or expanded:

  • Qualifying fundraising sales may be made at premises that are leased for 10 days or less.

  • Sale of memberships by qualifying nonprofit organizations with missions similar to the YMCA, YWCA, or JCC are exempt.

  • Nonprofit organizations with missions similar to the YMCA, YWCA, or JCC may purchase certain items exempt from sales tax. Only items used in the performance of the organization’s mission qualify for this exemption.

Petroleum Products

Starting July 1, 2017, special fuel purchased for the following items is exempt from sales tax and excise tax:

  • Refrigeration unit mounted on a licensed motor vehicle, with a separate motor.

  • Unlicensed motor vehicle used solely or primarily to move semitrailers short distances.

  • Power take-off unit or auxiliary engine in or on a licensed motor vehicle (does not matter if the engine has its own fuel tanks or shares one with the motor vehicle).

Soccer Stadium

Materials and supplies used or consumed in and equipment incorporated into the construction of the St. Paul soccer stadium and its infrastructure are exempt.

Suite Licenses

Starting July 1, 2017, the sale of a private suite, private skybox, or private box seat license is exempt from sales tax if all of the following conditions apply:

  • The charge is separately stated from the charge of admission.

  • The room is available for use on non-game or non-event days.

  • The sales price for admission, excluding the license, is equal to or greater than the highest priced general admission ticket for the closest seat not in the suite, skybox, or box seat.

Super Bowl

Super Bowl LII will be played at U.S. Bank Stadium in Minneapolis on February 4, 2018.

There are several sales tax exemptions for the game and related events. These exemptions also apply to local and special local taxes.

Note: For more information visit our Super Bowl web page.

Telecommunications Equipment

Starting July 1, 2017, purchases of fiber and conduit used to provide telecommunications or pay television services are exempt from sales tax.

Vending Machines

Starting July 1, 2017, only prepared food, soft drinks, candy, and dietary supplements will be taxable when sold from a vending machine. 

Other

Claims for Refund

If a business has a published “no resale” policy on merchandise, customers buying these items for resale must pay tax on the purchase, and refunds will not be issued to the purchaser.

Marketplace Provider

The Marketplace Provider law extends the responsibility to collect and remit sales tax to internet marketplace providers located in Minnesota, unless the sellers on the marketplace site are already collecting the tax. This law is effective July 1, 2019, or earlier if the U.S. Supreme Court or Congress allows for collection of sales tax on remote sellers.

Motor Vehicles

The following motor vehicle sales tax changes are effective immediately.

  • When a non-Minnesota business entity purchases a vehicle under the control of a resident of Minnesota, the Minnesota resident is presumed to be the owner of the vehicle if two of the six factors listed in the law are true (effective May 31, 2017).

  • Motor vehicle titles transferred upon death are treated as an inheritance. No sales tax is due on the value of the vehicle (effective July 1, 2017).

Privilege of Admission and Amenities

Clarifies that a charge for an amenity included with the charge for admission is not subject to tax if the amenity is separately stated, the purchaser is entitled to add or decline the amenity, and the amenity is not otherwise taxable.

Stadium Builder’s Licenses

  • Clarifies that effective immediately, stadium builder’s seat licenses at U.S. Bank Stadium are exempt.

Real Property

For purposes of sales tax, real property includes land, permanent buildings and structures, and improvements and fixtures incorporated into and intended to be of a permanent benefit to a building or structure given its current use and that cannot be removed without causing substantial damage to the building or structure.

Note: For more information visit our Real Property web page.

Sales Suppression Software

Starting August 1, 2017, any person or business who sells, transfers, develops, manufactures, or possesses with the intent to sell or transfer an automated sales suppression device to commit tax fraud or suppress sales is liable for a civil penalty; and any person or business who sells, purchases, installs, transfers, develops, manufactures or uses a sales suppression device knowing that the device is capable of being used to commit tax fraud or suppress sales is guilty of a felony. The devices are subject to forfeiture as contraband.

Special Local Tax Definitions

The law clarified that when the Department of Revenue administers a local government’s special local tax (e.g., food and beverage taxes, lodging taxes), the terms in the local law are defined in a manner consistent with general sales tax law, or consistent with the Department’s position as to the extent of the tax base. This is true regardless of whether the local government specifically or formally adopts the definitions into its local law.