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Last Updated: 1/2/2014

New Surety Deposit Requirements for Non-Minnesota Construction Contractors

​Starting Jan. 1, 2014, a new surety deposit threshold applies for businesses and state and local government units (city, county, school districts) that contract with non-Minnesota construction contractors.

For any one contract that exceeds $50,000, the business or government unit must withhold 8 percent from payments and send the money to the Department of Revenue. The department will hold the funds as surety for the payment of state taxes owed as a result of the contract.

Previously, a surety deposit was required if the total value of all contracts with a vendor during the year exceeded $50,000.

For more information about this law, including exceptions to the withholding requirement, see Withholding Tax Fact Sheet 12 – Surety Deposits for Non-Minnesota Construction Contractors.

The law that applies is Minnesota Statutes, section 290.9705.