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Last Updated: 3/24/2017

Nontaxable Sales

You do not need to charge Minnesota sales tax when you:

  • Ship or deliver products to customers outside of Minnesota
  • Sell items that are exempt by law
  • Provide nontaxable services
  • Receive a completed Form ST3, Certificate of Exemption from your customer

Out-of-state sales

Items shipped or delivered to a customer out of state are not taxable. You must keep records that show the items were shipped or delivered outside of Minnesota.

Items exempt by law

When you sell an exempt item, show the item separately on the invoice. You do not have to provide any other proof why no tax was charged. Common examples include:

Note: Each of the above categories may include both taxable and nontaxable items. See the corresponding fact sheet for details. 

Nontaxable services 

Most services are not taxable. The services that are taxable are specified in state law. For more information, see:

Form ST3, Certificate of Exemption

Sales to certain types of customers and for certain uses are not taxable. You must charge sales tax unless the customer gives you a completed Form ST3, Certificate of Exemption. You must keep the form in your records.

For the form to be complete, the customer must complete these required sections:

  • Purchaser’s name and address
  • Purchaser’s identification number
  • Type of business
  • Reason for exemption
  • Signature

Note: The federal government may provide proof of government purchase and payment instead of Form ST3, Certificate of Exemption. For more information, see the Government – Federal and Foreign Diplomats Industry Guide.  

Gift certificates and gift card sales

Gift certificates and gift cards are not taxable when sold. When a gift certificate or gift card is redeemed, charge sales tax on any taxable portion of the purchase. Apply the amount of the gift certificate or card as a cash payment.

Note: Your purchase of gift card or certificate stock is taxable.

Restocking fees

Restocking fees are not taxable.

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