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Last Updated: 8/4/2017

Sales of Goods and Services by Local Units of Government

Taxable Sales

Local governments generally provide nontaxable services to the public. However, you must charge sales tax if you sell taxable goods or services, unless an exemption applies. Do not pay sales tax when you purchase goods and services for resale. Instead, give your supplier a completed Form ST3, Certificate of Exemption. Specify the resale exemption.

Examples include but are not limited to:

  • Admissions and membership to athletic facilities, recreational areas, or places of amusement, (see Fact Sheet 123)
  • Admissions to city or county parks
  • Admissions to community centers with athletic or recreational facilities
  • Books and informational brochures
  • Campground fees
  • Copies (unless required to be furnished by law)
  • Equipment rentals (canoes, golf carts, tables and chairs)
  • Fees to fax a document
  • Golf membership and green fees
  • Maps
  • Vending machine sales including prepared food, soft drinks, candy, and dietary supplements (see Fact Sheet 158)

Examples of taxable services include, but are not limited to:

  • Alarm monitoring services, (see Fact Sheet 114)
  • Lawn mowing, tree trimming, stump removal, and spraying services, (see Fact Sheet 121A)
  • Parking charges, except residential or meters, (see Fact Sheet 166)
  • Towing charges, including administrative fees, (see Fact Sheet 113)
  • Utilities such as electricity, steam, gas, communications, and commercial water

Waste management services

Waste management services are not subject to sales tax. But they are subject to Solid Waste Management (SWM) Tax, which is reported on your sales tax return. Bags and stickers sold to customers to bundle or mark waste for pickup are also subject to the SWM Tax.

Nontaxable Sales

The following are examples of nontaxable sales: 

  • Copies required to be furnished by law (Minnesota Data Practices Act)
  • Educational lessons
  • Meals and drinks when furnished, prepared, or served to:
    • Patients at hospitals, sanitariums, nursing homes, or senior homes as part of routine care and included in the facilities charge (see Fact Sheet 118)
    • Anyone on pre-kindergarten through 12th grade school premises, (see Fact Sheet 111)
    • Inmates or residents at correctional, detention, or detox facilities
  • Notary services
  • Permit fees
  • Pet licenses
  • Primary residential heating during winter months (see Fact Sheet 157)
  • Residential water and sewer services
  • Security or detective services by an off-duty peace officer within the jurisdiction that officer normally serves
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