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Last Updated: 4/3/2014

Sales During Transitional Periods ("Transitional Sales")

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​A transitional period occurs when a change in the sales tax rate affects the sale of taxable services with a billing period that begins before – and ends after – the effective date of the change. The information below outlines how sales or use tax applies to these “transitional sales.”

Note: Transitional periods do not affect sales of tangible personal property (goods). For these purchases, sales or use tax applies on the specific date a buyer takes possession or title of the property being purchased, whichever happens first.

Who is affected?

Transitional periods can affect:

  • Businesses that sell taxable services

  • Construction contractors

  • Maintenance agreements

Businesses that purchase these services should check their invoices to make sure sales tax was applied correctly. If sales tax was not charged, or was incorrect, the buyer is responsible to calculate and pay any use tax that is due. For more information, see Fact Sheet 146, Use Tax for Businesses, or Fact Sheet 156, Use Tax for Individuals 

How do I handle transitional sales?

It depends if the sales tax rate increased or decreased, or if you have a construction contract. For more information, see:

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