Minnesota Sales Tax Applies to Parking Fees Deducted From Payroll

Monday, May 19th, 2014

 
 
A indoor parking garage.
Share
Link
Minnesota
General

The Minnesota Tax Court recently ruled that an employer's provision of parking to its employees was subject to tax.

The taxpayer operated several hospitals. The taxpayer offered hospital employees the opportunity to use its parking facilities. Because the parking was a transportation fringe benefit under federal tax law, employees could pay for parking through pre-tax payroll deductions. If the employees chose to do so, the taxpayer deducted the payments from the employee's pre-tax wages.

Minnesota sales tax applies to nonresidential parking services furnished for a consideration. The requirement for "consideration" means that there must be a bargain. A bargain is a negotiation where one party voluntarily assumes an obligation in exchange for the other party acting in some way.

The tax court ruled that the taxpayer furnished parking services for a consideration. The taxpayer assumed the obligation to provide parking. In return, the employees allowed the taxpayer to reduce the wages that they would otherwise have received. There was a bargain and thus consideration. Minnesota sales tax therefore applied to the taxpayer's provision of parking to its employees.

http://www.taxcourt.state.mn.us/published%20orders/2014/allina%20v%20cor%2005-08-14%20sj.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Louisiana Sales Tax Rates and Exemptions Set to Change...

Friday, May 25th, 2018 -Louisiana's sales tax rates and exemptions are set to change July 1, 2018, when several 2016 law changes will ...

Florida Exempts Generators Used in Assisted Living...

Thursday, May 24th, 2018 -Florida recently adopted an emergency rule on exempt sales of emergency generators for use at nursing homes an...

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...