Nontaxable Sales

Products or services delivered to a customer outside of Minnesota are not subject to Minnesota tax. No exemption certificate is required. You must maintain records that show the items were shipped to a customer outside of Minnesota.

The customer may owe use tax in the state where the product was delivered.

Video production services are not taxable when you provide them as part of a sale of a nontaxable advertising services. To qualify as a provider of nontaxable advertising, you must meet three requirements:

• The final product has no use beyond advertising (such as for employee training)
• You create the advertising (rather than sending the raw video to an ad agency)
• You work directly with the advertiser (rather than as a subcontractor)

If you meet the above requirements, do not charge sales tax. Your invoice must clearly state that you provided “creative promotional services.” No exemption certificate is required.

Note: You must pay sales or use tax on all taxable inputs used to create the advertising. For more information, see Taxable Purchases and Use Tax.

Video 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.

Note: Sales to advertising agencies are taxable unless an exemption applies.