Taxable Purchases and Use Tax

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.

Tokens, tickets, and prizes are taxable to operators of the machines unless an exemption applies.

Prizes for games of skill or chance conducted at events lasting less than six days, such as carnivals, festivals, and fairs, are exempt. Give your supplier a completed Form ST3, Certificate of Exemption. Use Code Other and write in prizes.

Purchases and leases of new or used vending machines or other coin-operated devices for use in Minnesota are taxable.

Example

• If a Minnesota company buys a machine for temporary use in another state and later brings the machine into Minnesota, use tax is due on the machine purchase price. If you were required to pay another state’s sales tax, but it was lower than Minnesota’s rate, use tax is due based on the difference in rates. See Use Tax section below.

Parts used to repair machines are taxable. Repair labor is not taxable if the labor is separately stated on the invoice. If labor is not separately stated, the entire amount of the invoice is taxable.