Taxable Purchases (Applies to All Personal Services)

Sales of items you use in your trade or business are not taxable if:

• The sale is not made in the normal course of business
• The total amount from the sale or trade of business property during the calendar month of the sale and the preceding 11 calendar months does not exceed $1,000.

For more information, see Isolated and Occasional Sales.

Discount vouchers and group coupons, can be purchased online and then brought to the retailer for the discount. The purchase of a discount voucher is not taxable.

If the item (or service) is taxable, charge sales tax when the voucher or coupon is redeemed.

Note: The retailer's records must support the tax calculation.

For more information, see Coupons, Discounts, and Other Forms of Payments.

Sourcing rules determine what state and local taxes apply to a retail sale of goods or services. Generally, services are sourced to the location where the purchaser does one of the following:

• Receives the service
• Makes first use of the service

Example

A massage therapist performs a massage in St. Paul. The therapist must charge Minnesota general sales tax, St. Paul, and Ramsey County Transit taxes on the massage.

If you buy, lease, or rent taxable items or services without paying sales tax to the seller, you owe use tax. Use tax is due on your cost of the item.

If you bring items into Minnesota or take items out of inventory for a taxable use, you may also owe use tax. 

You must set up a system to record and pay use tax. For more information, see Use Tax for Businesses. 

Certain services are taxable. Examples include:

• Building cleaning and maintenance
• Lawn and garden care services
• Laundry and dry cleaning services

Office equipment and supplies used in your business are taxable. Examples include:

• Cash registers
• Computers
• Furniture and fixtures
• Office accessories
• Prewritten computer software