MNDOR logo

Published on Minnesota Department of Revenue (https://www.revenue.state.mn.us)

Purchases

richard.kachelmeyer

Guide Menu

Back to Sales Tax Fact Sheets and Industry Guides
Hotels and Other Lodging Establishments Guide
field_block:node:guide:field_last_updated
Last Updated
field_block:node:guide:title

Purchases

field_block:node:guide:body

Depending on how an item or service is used in your business, it may or may not be taxable.

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 the table below for specific examples.

Taxable PurchasesExamples
General items
  • Cash registers and register tapes
  • Cleaning supplies
  • Computer hardware and software
  • Furniture and fixtures
  • Lawn care and landscaping supplies
  • Office equipment and supplies
  • Pool supplies and chemicals
  • Security systems
  • Snow removal equipment
Lodging and other complimentary service items
  • Beds and mattresses
  • Draperies and bedspreads
  • Exercise equipment
  • Linens and towels
  • Paper towels
  • Postcards, stationery, envelopes, and pens
  • Soap, shampoo, and complimentary personal items
  • Telephones, radios, TVs, and DVD players
  • Toilet tissue
Cooking and serving equipment
  • Appliances
  • Cookware
  • Dishes and glassware
  • Linens
  • Silverware
  • Tablecloths
Utilities
  • Electricity
  • Gas
  • Water
Taxable services

For more information, see Taxable Services.

Promotional items
  • Business cards
  • Matches
  • Specialty advertising materials

Nontaxable Purchases

Items for Resale

You may purchase items exempt for resale if both of these conditions apply:

  • you sell the item at retail or hold the item exclusively for lease or rental to the customer
  • the charges for these items are separately stated from the lodging accommodations

To purchase items exempt for resale, give your seller a completed Form ST3, Certificate of Exemption.

Examples of items for resale include:

  • Guest laundry services 
  • Paper cups, napkins, etc. sold as part of a meal or drink (except for complimentary meal or drink)
  • Pop, candy, and other items sold at retail or in vending machines 
  • Recreational equipment to be rented separately 

Coin-Operated Entertainment and Amusement Devices

Retailers may buy these devices exempt from tax if they sell admissions to or use of the devices.

Examples of coin-operated entertainment and amusement devices include:

  • Batting cages
  • Fortune-telling machines 
  • Jukeboxes
  • Pool tables
     

Note: Vending machines, lottery devices, or gaming devices do not qualify for this exemption.

For more information, see Vending Machines and Other Coin-Operated Devices.

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 Use Tax for Businesses and Local Sales and Use Taxes.