Taxable Purchases and Use Tax


Items you use to operate your business are taxable unless a specific exemption applies. Several services are also taxable. If you do not pay sales tax on a taxable purchase, then you owe use tax. See the following table for examples.

Taxable PurchasesExamples
General items
  • Cash register tapes
  • Cleaning supplies
  • Computer hardware and software
  • Free candy and matches
  • Furniture and fixtures
  • Menus
  • Office equipment and supplies
  • Paper towels
  • Toilet tissue
Cooking and serving equipment
  • Appliances
  • Cookware
  • Dishes and glassware
  • Linens
  • Silverware
  • Tablecloths
  • Electricity
  • Gas for cooking and heating
  • Water
Taxable services

For more information, see a complete list of taxable services.

Note: Eating establishments generally do not qualify for the industrial production and capital equipment exemptions.

Vehicles and Trailers

Licensed vehicles and trailers are subject to the Motor Vehicle Sales Tax (not the state general sales tax).

Installing equipment and utilities to convert a vehicle or trailer to serve food is taxable.

For more information, see Motor Vehicle.

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.