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Last Updated: 2/17/2016

Taxable Purchases (applies to all types of personal services)

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

You owe use tax if you buy, lease, or rent taxable items or services without paying sales tax to the seller. Use tax is due on your cost of the item.

You may also owe use tax if you bring items into Minnesota or if you take items out of inventory for a taxable use.                     

You must set up a system to record and pay use tax. For more information, see Fact Sheet 146, Use Tax for Businesses.

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 ​ ​Recordkeeping >
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