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Last Updated: 9/21/2018

Taxable Purchases (applies to all professional services)

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Taxable Purchases

Items you use to operate your business are taxable unless an exemption applies. Several services are also taxable. If you do not pay sales tax on a taxable purchase, then use tax is due. See below for specific examples.

 

Examples of taxable purchases

  • Artwork
  • Computer systems
  • Desks and accessories
  • Printers/copiers
  • Phone systems
  • Toner
  • Publications (manuals, maps, books)
  • Equipment rentals
  • Flowers
  • Catered food and beverages

Protective equipment

Protective equipment is designed for protection from injury or disease. Protective equipment is taxable. Examples include:
 
  • Face shields
  • Hard hats and liners
  • Helmets
  • Safety belts
  • Safety vests
For more information, see Fact Sheet 105, Clothing.
 

Employee purchases

Purchases made for the business by an employee that you later reimburse are taxable. Taxable items purchased and placed on the employee’s expense report or company credit card are also taxable.
 

Advertising materials

If advertising has a use other than advertising a message it is taxable. Examples include:
 
  • Business cards
  • Calendars
  • Cups and mugs
  • Holiday/greeting cards
  • Key chains
  • Pens
For more information, see Fact Sheet 133, Advertising.
 

Examples of taxable services

A complete list of taxable services can be found on our website.

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.

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