Minnesota Updates Guidance on the Taxability of Sales to Governments

Wednesday, January 21st, 2015

Minnesota Department of Revenue

The Minnesota Department of Revenue revised its guidance for sales to governments.

Sales to the federal government are not taxable if the retailer receives a purchase order, payment voucher, work order, or completed Form ST3 directly from the federal government. Sales to federal government employees are taxable, even when reimbursed by the federal government.

Purchases of tangible personal property by Minnesota state agencies are subject to sales tax. Generally, the agency pays sales tax on property directly to the Department of Revenue through a direct pay authorization. The agency must include details about the direct pay authorization in its purchase order instead of providing an exemption certificate. However, the agency pays sales tax to the retailer on purchases of prepared food and motor vehicles.

Purchases of taxable services by Minnesota state agencies are subject to sales tax. Agencies do not have direct pay authorization for purchases of taxable services. The retailer collects the sales tax at the time of purchase. Taxable services include lodgings, admissions to places of amusement, and cell phone and pager services.

Local governments are exempt from paying local and state sales tax on most purchases. Local governments must present a complete Form ST3 or Certificate of Exemption at the time of purchase. Local governments include counties, cities, townships, school districts and other municipalities, and most local government instrumentalities.


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.

Texas Releases Detailed Guidance on Exempt Organizations

Thursday, October 18th, 2018 -The Texas Comptroller has released a publication that provides detailed information on how sales and use tax a...

Telephone Answering Services Taxable in Arkansas

Tuesday, October 16th, 2018 -The Arkansas Department of Finance and Administration recently ruled that the service of answering calls on be...

Washington Provides Guidance on Lodging Tax for Online...

Friday, October 12th, 2018 -The Washington Department of Revenue released updated guidance that provides tax reporting information for bed...

Economic Nexus in West Virginia

Wednesday, October 10th, 2018 -The West Virginia State Tax Department announced that it will require remote sellers to begin collecting sales...

Idaho Provides Guidance on the Exemption for Medical...

Monday, October 8th, 2018 -The Idaho State Tax Commission recently released guidance that explains Idaho's sales and use tax laws for buy...

Arkansas Does Not Follow Federal Law on Foreign Income

Friday, October 5th, 2018 -The Arkansas Department of Taxation and Finance recently released an opinion that says the state does not conf...