Purchases

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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 Purchases	Examples
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	Building cleaning and maintenance Carpet, drapery, and upholstery cleaning Detective and security Laundry and dry cleaning services including cleaning of linens and uniforms Lawn and garden care 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.

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