• Print Page Print Guide

Guide Menu

Back to Sales Tax Fact Sheets and Industry Guides
Retailers and Wholesalers Industry Guide
field_block:node:guide:field_last_updated
Last Updated
field_block:node:guide:title

Purchases and Use Tax

field_block:node:guide:body

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.

Taxable Purchases

The following purchases are subject to sales or use tax.

Taxable PurchasesExamples
General items
  • Cleaning supplies
  • Computer hardware and software
  • Employee name badges
  • Furniture and fixtures
  • Invoices
  • Office equipment and supplies
  • Paper towels
  • Toilet tissue
  • Training videos and materials
Retail equipment and supplies
  • Cash registers and register tape
  • Price guns and labels
  • Price stickers
  • Product and price lists
  • Scanners
  • Security tags
  • Shelves and racks
  • Shopping baskets and carts
Promotional items
  • Calendars
  • Magnets
  • Pens
Utilities
  • Electricity
  • Gas
  • Water
Taxable services

For more information, see Taxable Services.

 

Nonreturnable Packaging

You can purchase nonreturnable materials used to package products exempt from sales tax. Give your supplier a completed Form ST3, Certificate of Exemption. Specify the resale exemption.

Examples of nonreturnable packaging materials:

  • Bubble wrap, shipping peanuts, tissue paper
  • Cartons, containers, cans, and boxes
  • Nonreturnable pallets and skids
  • Plastic or paper bags
  • Product identification labels
  • Stuffing materials (straw, dry ice, shredded paper, etc.)
  • Warranty cards, owner manuals, instruction sheets

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.

Note: If you are not required to be registered for sales tax, you may register for use tax only to pay the use tax.