Below are some examples of services and products and whether or not the sale is taxable.

When a package sale includes taxable and nontaxable items or services for one price, the package is taxable. When the taxable items or services are 10 percent or less of the package price, the package is not taxable.

Examples

1. A $100 spa package includes:

• Massage ($45, taxable)
• Small lunch ($10, taxable) 
• Pedicure and manicure ($45, nontaxable)

The spa package is taxable because the massage and lunch is 55 percent of the package price.

2. A $200 spa package includes:

• Facial ($65, nontaxable)
• Body wrap ($80, nontaxable)
• Small lunch ($10, taxable)
• Pedicure and manicure ($45, nontaxable)
   

The spa package is nontaxable because the lunch is 5 percent of the package price.

Examples of nontaxable and taxable purchases are listed below.

Below are some examples of taxable and nontaxable tanning services.

Note: Tanning equipment contains lamps (ultraviolet or other) that tan skin through exposure to ultraviolet radiation.

Tanning products sold to a customer are taxable. You do not pay sales or use tax when you purchase these products. Instead, give your supplier a completed Form ST3, Certificate of Exemption, and specify the resale exemption. Examples include:

• Bronzers
• Lotions, creams, or sprays
• Tanning accelerators or extenders

Examples of nontaxable and taxable purchases are listed below.

Donated massages are not taxable. The donor owes sales or use tax on any taxable items used in providing the massage.

When a business contracts with a massage therapist to provide massage services, the party who bills the customer is responsible for collecting and reporting the sales tax. 

The massage is not taxable if a customer has a written referral from a licensed health professional stating the massage is for the treatment of illness, injury, or disease. A written referral must:

• State the massage is for ongoing treatment of illness, injury, or disease
• Be written by a licensed health care provider or licensed health care facility

A written referral is a form of tax-exempt documentation, and you must keep a copy of all of them. 

The massage is not subject to sales tax if it is for ongoing treatment of illness, injury, or disease and is provided by or through a licensed health care facility (hospital, medical clinic, or chiropractor's office). However, the massage is subject to MinnesotaCare tax.

For more information, see Revenue Notice 07-06: Minnesota Care Tax and Sales Tax-Patient Services-Massage Therapy.

Products sold to a customer are taxable. You do not pay sales or use tax when you purchase these products. Instead, give your supplier a completed Form ST3, Certificate of Exemption. Specify the Resale exemption. Examples include:

• Dietary supplements
• Herbs
• Lotions/oils
• Vitamins

Diet and weight loss programs help clients get or keep a goal weight. Below are some examples of taxable and nontaxable services and products.

Program products included in the price of the weight loss program are not taxable when the cost of the items is 10% or less of the total program fee.

You must pay sales or use tax when your purchase the items included in the program fee.

Fees for personal trainers are not taxable. However, monthly gym memberships that include access to personal trainers as well as the gym classes and equipment are taxable.

If the charge for a personal trainer is listed separately from the monthly gym membership, the personal trainer fee is not taxable.

Fees to attend yoga classes are not taxable. However, monthly gym memberships that include access to yoga classes and all the other gym classes and equipment are taxable if the charge for the use of the facility is a significant part of the total cost of the lessons.

If the charge to attend a yoga class is listed separately from the monthly gym membership, the yoga fee is not taxable.

Sales or rentals of yoga mats or towels are taxable. You do not pay sales or use tax when you purchase these products. Instead, give your supplier a completed Form ST3, Certificate of Exemption, and specify the resale exemption.

A gym/yoga studio that provides free yoga mats or towels to their customers who work out at the facility must pay sales or use tax on their purchase of these items.

The following services are not taxable:

• Ear/body piercing
• Permanent makeup
• Shoeshine
• Tattoo

Products sold to a customer are taxable. You do not pay sales or use tax when you purchase these products. Instead, give your supplier a completed Form ST3, Certificate of Exemption. Specify the Resale exemption. Examples include:

• Aftercare package
• Jewelry
• Lotions
• Posters

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 Isolated and Occasional Sales.

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.

For more information, see Coupons, Discounts, and Other Forms of Payments.

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 Ramsey County Transit taxes on the massage.

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

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

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

Certain services are taxable. Examples include:

• Building cleaning and maintenance
• Lawn and garden care services
• Laundry and dry cleaning services

Office equipment and supplies used in your business are taxable. Examples include:

• Cash registers
• Computers
• Furniture and fixtures
• Office accessories
• Prewritten computer software

• 155A.23, subd. 3, Cosmetology
• 154, Barbers
• 297A.61, Definitions:
  • subd. 3(g)(6)(vii), Massages
  • subd. 7, Sales price
  • subd. 28, Purchase price
• 297A.68, Business exemptions:
  • subd. 3, Materials used in providing certain taxable services
• 297A.67, General exemptions
  • subd. 2, Food and food ingredients
  • subd. 8, Clothing
  • subd. 23, Occasional sales

• 8130.0400, subp.4. Services of operator furnished with rentals of equipment
• 8130.0600, Consideration
• 8130.3100, Content and form of exemption certificate

• Revenue Notice 00-03, Exemption: Materials Used or Consumed in Providing Taxable Services
• Revenue Notice 07-06, MinnesotaCare Tax and Sales Tax-Patient Services-Massage Therapy

• Clothing
• Coupons, Discounts, and Other Forms of Payment
• Dietary Supplements
• Food and Food Ingredients
• Isolated and Occasional Sales
• Prepared Food
• Use Tax for Businesses