Government - State Agencies Industry Guide
Government - State Agencies Industry Guide
Minnesota state agencies are not exempt from paying sales and use tax.
However, they pay most sales or use taxes directly to the Minnesota Department of Revenue.
This information describes the sales and use tax topics related to state agencies. Use the links in the Guide Menu to see information about that topic.
Sales
Sales
State agencies generally provide nontaxable services to the public. However, you must charge sales tax if you sell taxable goods and services, unless an exemption applies.
Examples include:
- Admissions to state parks
- Campground fees
- Camping accessories
- Equipment rentals (canoes, kayaks, GPS units)
- Greenhouse supplies
- Lodging
- Maps or travel guides
- Parking fees
- Prepared food, candy, and soft drinks
- Seeds and plants
- Vending machine sales including prepared food, soft drinks, candy, and dietary supplements
Do not pay sales tax when you purchase goods and services for resale. Instead, give your supplier a completed Form ST3, Certificate of Exemption. Specify the Resale exemption.
Note: You must pay tax on purchases to provide admission to parks, campground fees, lodging, and parking services.
Interagency Transfers
Interagency transfers are not taxable. Certain state agencies may produce goods and services to support other state agencies’ operations. The reimbursements between the provider and recipient are considered exchanges and are not taxable. The state agency owes tax on any taxable inputs used to produce the goods and services provided.
Purchases
Purchases
You must pay sales tax directly to the vendor.
You cannot use your direct pay authorization to purchase the following items:
- Admissions to places of amusement or athletic events, or charges to use an amusement device
- Building cleaning and maintenance
- Detective or security services
- Laundry and dry cleaning
- Lawn care
- Lodging and related services
- Motor vehicles
- Motor vehicle cleaning, rustproofing, undercoating, or towing
- Parking services
- Taxable food or beverages
Filing Returns and Recordkeeping
Filing Returns and Recordkeeping
When filing your return, you must report all sales tax collected and use tax you owe.
Filing Returns
If you are not registered for sales and use tax, you must contact the Minnesota Department of Revenue and register to collect and report taxes. Call Business Registration at 651-282-5225 or 1-800-657-3605 (toll-free).
For more information, see Sales Tax Return Due Dates.
How to Report Sales and Use Tax
You must file a Sales and Use Tax return online through our e-Services system. For more information, see Filing Information.
Recordkeeping
It is important to keep good records to determine the correct amount of state and local tax you owe.
Your records should include:
- bills, receipts, invoices, cash-register tapes, and any other documents that support the entries in your books
- exemption certificates
- shipping documents
- worksheets used to prepare your tax returns
For more information, see the Sales and Use Tax Business Guide.
Legal References and Resources
Legal References and Resources
The legal references and resources related to the government - state agencies industry are listed.
Minnesota Statutes
- 297A.89, Direct payment by purchasers permitted
- 297A. 70. Exemption of governments and nonprofit groups