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Last Updated: 9/13/2018

Taxable Purchases (applies to all types of personal services)

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Sale of property used in business

Sales of items you use in your trade or business are not taxable if:

  • The sale is not made in the normal course of business.
  • The total amount from the sale or trade of business property during the calendar month of the sale and the preceding 11 calendar months does not exceed $1,000.

For more information, see Fact Sheet 132, Isolated and Occasional Sales.

Group discount vouchers

Discount vouchers and group coupons, can be purchased online and then brought to the retailer for the discount. The purchase of a discount voucher is not taxable.

If the item (or service) is taxable, charge sales tax when the voucher or coupon is redeemed.

Note: The retailer's records must support the tax calculation.

Do you know how much the customer paid for the group discount voucher?

​Charge sales tax on

​Yes

​Amount the customer paid for the discount voucher

​No

​Face value of the discount voucher

For more information, see Fact Sheet 167, Coupons, Discounts, and Other Forms of Payments.

Sourcing Rules

Sourcing rules determine what state and local taxes apply to a retail sale of goods or services. Generally, services are sourced to the location where the purchaser does one of the following:

  • Receives the service
  • Makes first use of the service

Example. A massage therapist performs a massage in St. Paul. The therapist must charge Minnesota general sales tax, St. Paul, and Transit Improvement local sales taxes on the massage.

Use tax

If you buy equipment, supplies, or other taxable items for your business and the seller does not charge Minnesota sales tax, you owe use tax on the cost of the items. If your business is located in an area with a local tax, you may also owe local use tax.

Some common situations where you may owe use tax include:

  • You buy taxable items or services online without paying sales tax
  • You withdraw an item from inventory to use (instead of selling it), donate, or give away
  • You buy taxable items outside of Minnesota
  • You buy taxable items in another Minnesota city or county with a lower (or no) local sales tax

For more information, see Fact Sheet 146, Use Tax for Businesses and Fact Sheet 164, Local Sales and Use Taxes.

Taxable services

Certain services are taxable. Examples include:

  • Building cleaning and maintenance
  • Lawn and garden care services
  • Laundry and dry cleaning services

Office equipment and supplies

Office equipment and supplies used in your business are taxable. Examples include:

  • Cash registers
  • Computers
  • Prewritten computer software
  • Furniture and fixtures
  • Office accessories  
​< Miscellaneous Personal Services ​ ​Filing Returns and Record-keeping >
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