If you hire or contract with a non-Minnesota contractor to perform construction work in Minnesota, you must withhold 8% (.08) of their compensation as a Minnesota surety deposit.
Payments are subject to 8% withholding only if the work was performed in Minnesota and the value of the contract exceeds $50,000.
The cash surety is deposited with the Minnesota Department of Revenue. It is used as a guarantee that the contractor has fulfilled the requirements for withholding, sales and use, franchise, and income taxes.
For more information, see Surety Deposits for Non-Minnesota Construction Contractors.