Taxable Purchases and Use Tax

This section describes taxable purchases and use tax for financial institutions.

Taxable Purchases

Purchases made by federally chartered banks and savings and loans and state chartered credit unions, banks, and savings and loans are taxable.

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 below for specific examples.

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.