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Taxable Purchases and Use Tax

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Items you use to operate your business are taxable, unless an exemption applies. Some services are also taxable.

If you do not pay sales tax on a taxable purchase, you must pay use tax.

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Type of Taxable Purchase	Examples
General items	Cleaning supplies Computer hardware and software Dollies Furniture and fixtures Office equipment and supplies Paper towels Reusable containers Reusable pallets Security systems Toilet tissue
Retail equipment and supplies	Cash registers and register tapes Price guns and labels Shelves and racks Shopping baskets and carts
Utilities	Electricity Gas Water
Taxable services	Building cleaning and maintenance Detective and security Laundry and cleaning Lawn and garden care For more information, see a list of taxable services.
Promotional items	Bean bag boards Business cards Calendars Cups and mugs Flash buttons Key chains Matches Pens Umbrellas

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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Taxable Purchases and Use Tax