Everything You Need To Know About Minnesota'S Sales Tax Rate In 2023
General Minnesota Sales Tax Rate in 2023
As of 2023, the general sales tax rate in Minnesota is 6.875%. This rate applies to most products and services sold in the state and is collected directly from customers at the point of sale. The sales tax rate in Minnesota is made up of a 6.25% state rate, as well as a variable local rate that varies by county. In some areas, the total sales tax rate is as high as 8.875%.
What Is Taxable in Minnesota?
In Minnesota, sales tax is generally charged on all tangible personal property, as well as certain services. This includes items such as clothing, furniture, electronics, and other items that can be seen, touched, and moved. Sales tax is also charged on certain services, such as repair and cleaning services, landscaping, and certain professional services.
What Is Not Taxable in Minnesota?
Generally, items that are not considered tangible personal property are not subject to sales tax in Minnesota. This includes items such as digital products, as well as services such as real estate rentals and legal services. In addition, some items may be exempt from sales tax due to their intended use, such as food and prescription medications.
Local Sales Tax Rates in Minnesota in 2023
In addition to the state rate, local sales tax rates may apply in certain areas of Minnesota. The local rate is typically based on the county or city in which the customer is located. For example, in Anoka County, the local rate is 0.75%, while in Hennepin County, the local rate is 1.125%. The total sales tax rate in these areas is then 7.625% and 7.125%, respectively.
Minnesota Sales Tax Holidays in 2023
The state of Minnesota also offers sales tax holidays throughout the year, where certain items can be purchased without paying sales tax. These items usually include clothing and back-to-school items, such as books and school supplies. The dates of the sales tax holidays vary from year to year, so it is important to check the state website for the most up-to-date information.
Minnesota Sales Tax Exemptions in 2023
Sales tax may be exempt in certain situations for certain types of items. For example, items purchased for resale or for use in a business may be exempt from sales tax. In addition, some items may be exempt from sales tax if they are purchased for a specific use, such as food or prescription medications.
Sales Tax Collection Requirements in Minnesota in 2023
Businesses that sell taxable items or services in Minnesota must register with the state and collect sales tax from their customers. Businesses must also update their sales tax rates whenever the local rate changes, and must file monthly or quarterly sales tax returns. Additionally, businesses must keep detailed records of their sales and purchases, including invoices and receipts.
Minnesota Sales Tax Penalties in 2023
Businesses that fail to register, collect, or remit sales tax in Minnesota may be subject to penalties and interest. Penalties may include fines, suspension or revocation of the business's license, and criminal prosecution. Additionally, businesses may be liable for unpaid sales tax, and may have to pay a penalty and interest on any unpaid taxes.
Conclusion
The sales tax rate in Minnesota in 2023 is 6.875%, with local rates varying by county. Sales tax is generally charged on most tangible personal property, as well as certain services. However, certain items may be exempt from sales tax, such as digital products and food. Businesses that sell taxable items or services must register with the state, collect sales tax from customers, and file monthly or quarterly sales tax returns. Failure to comply may result in penalties, fines, and criminal prosecution.