Purchases and Use Tax
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 Purchases | Examples |
|---|---|
| General items |
|
| Parking supplies |
|
| Utilities |
|
| Taxable services |
For more information, see a Taxable Services. |
Building Cleaning
Building Cleaning
Building cleaning services are taxable. Ramps and parking garages are considered buildings. Outdoor lots are not considered buildings.
Examples of taxable building cleaning:
- Cleaning services, such as sweeping and washing
- Disinfecting, exterminating, and pest control services
- Lighting maintenance, such as bulb and fuse replacement
- Removing graffiti
- Removing junk
- Removing leaves and trash
Note: Charges for removing snow are not taxable.
Pay Stations, Meters, and Signage
Pay Stations, Meters, and Signage
Whoever installs equipment and materials into real property is the end user and must pay sales and use tax. A sign anchored in the ground or attached to a building or pole is considered real property. A sign attached to a building is part of the building.
When installing repair parts into real property, they are taxable to the person making the repairs.
Use Tax
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.
Nontaxable Purchases
Nontaxable Purchases
Inputs for parking services are taxable. However, some purchases are not taxable.
Examples of services and purchases:
- Accounting and legal services
- Advertising time or placement in media
- Cleaning of surface parking lots
- Painting of stripes in parking lots or ramps
- Security by off duty peace officer within the district they normally serve
- Snow removal
- Uniforms