Minnesota Sales Tax Guide

Do You Need to Collect and Remit Sales Tax in Minnesota?

If you’re doing business in Minnesota, there’s a good chance sales tax should be part of your business plan.

In general, businesses and individuals that make retail sales or provide taxable services must collect and remit Minnesota sales tax. This applies to most sales of tangible goods and a growing list of services. On top of that, a wide range of local sales taxes can apply depending on where your customer is located.

Of course, not everything is taxable. Minnesota provides a variety of exemptions, either defined by statute or triggered when a buyer submits a properly completed Form ST3 Certificate of Exemption. The key is knowing which rules apply and when.

Minnesota Taxability Matrix

The table below outlines common examples of what is generally taxable and generally exempt in Minnesota:

Minnesota’s taxability rules reward attention to detail, as they’re not always intuitive.

For example, which certain baby products are exempt, baby grooming and hygiene items (like lotions or wipes) are taxable. A lot of merchandise does not fit into one bucket, and assumptions can lead to mistakenly taxing the wrong products.

Do You Have Sales Tax Nexus in Minnesota?

Sales tax nexus is the connection that creates a filing and collection obligation in a state. In Minnesota, nexus can be established through either physical presence or economic activity.

Physical Sales Tax Nexus

You may have physical nexus in Minnesota if your business:

• Maintains a physical location in Minnesota
• Has employees, agents, or representatives operating in Minnesota
• Delivers goods using company-owned vehicles
• Performs taxable services in the state
• Owns or leases property in Minnesota
• Stores inventory in a warehouse or fulfillment center (including third-party facilities)

Even limited in-state activity can trigger nexus, so you should monitor your business activities carefully.

Economic Sales Tax Nexus

Minnesota’s economic nexus thresholds apply to remote sellers and are based on activity over the previous 12-month period.

You have economic nexus if you meet either of the following:

• 200 or more retail transactions shipped to Minnesota, or
• More than $100,000 in retail sales shipped to Minnesota

A single order counts as one retail sale, even if it includes multiple items. Additionally, thresholds include both nontaxable and taxable sales. However, you should exclude sales for resale in your nexus reviews.

Once you exceed either threshold, you must begin collecting Minnesota sales tax no later than the first day of a calendar month within 60 days of exceeding the threshold.

Not sure where you stand? Minnesota offers Form ST101 (Business Activity Questionnaire) to help determine nexus. But in practice, multi-state sellers often need a more comprehensive review. At SalesTaxSolutions.US, we provide in-depth nexus analyses for all states, so you can identify obligations before they become liabilities.

Are Marketplace Facilitators Required to Collect and Remit Sales Tax in Minnesota?

Yes. Minnesota requires marketplace facilitators to collect and remit sales tax when they meet economic nexus thresholds, or have a physical presence in the state. If the marketplace is collecting on your behalf, you should not collect tax on those sales yourself.

Out-of-state marketplace providers are subject to the same nexus standards as any remote retailer: 200 or more retail sales shipped to Minnesota or more than $100,000 in retail sales shipped to Minnesota over the prior 12 months. Once triggered, collection must begin within 60 days.

However, marketplace sellers still need to look at the full picture. If you also sell through your own website or other channels, your combined sales activity determines whether you’ve crossed nexus thresholds, including sales make on a registered marketplace.

What Platforms Are Marketplace Facilitators?

Common marketplace facilitators include:

• Amazon    
• eBay 
• Etsy    
• Walmart Marketplace
• Shopify Shop App

The rule of thumb: if the platform processes payments and facilitates the sale, it likely qualifies as a marketplace facilitator.

Filing Minnesota Sales Tax

We have covered taxability, nexus, and marketplace rules. Now, you’ll need to add compliance to your operations. Once you’ve determined nexus, the focus shifts to registering, collecting correctly, and filing on time.

Register for a Minnesota Tax ID

Before making taxable sales, you must register for a Minnesota Tax ID and Sales and Use Tax account. There are two ways to register:

1. Online via Minnesota’s Business Tax Registration system
2. By phone at 651-282-5225 or 1-800-657-3605 (toll-free)

When registering for a Sales and Use Tax account, you will need to provide the following information:

• Expected filing schedule (monthly, quarterly, annual)
• Accounting method (cash or accrual)
• Applicable local or special tax obligations

Collect Minnesota Sales Tax

Minnesota’s base state rate is 6.875%, but that’s just the starting point.

Now that you’re registered, you need to collect Minnesota sales tax at the correct rates. This means you must also account for:

• Local sales taxes (which vary by jurisdiction)
• Special local taxes on items like lodging, food, liquor, and entertainment

For remote sellers, accurate collection requires accurate destination-based sourcing, while keeping in mind that local rates change frequently. If your rate tables aren’t current, your compliance probably isn’t either.

An additional element to sales tax collection is a related fee that all businesses must report: Retail Delivery Fees. Minnesota introduced a Retail Delivery Fee effective July 1, 2024, and it’s easy to overlook. Retailers should charge $0.50 per qualifying delivery of taxable tangible goods or clothing if the order is $100 or more. It’s not technically sales tax, but it is reported on the same return.

File and Pay Minnesota Sales Tax

Minnesota requires all sales tax returns to be filed online through e-Services.

When filing, you’ll need your Minnesota Tax ID number, gross sales and taxable sales amounts, tax collected (state plus local), and any use tax owed. Returns must be filed for every period, even if no sales occurred and no tax is due.

If you have multiple locations and file a consolidated return, you can enter each location separately or upload a spreadsheet file. If you report via the Simplified Electronic Return system, Minnesota also accepts SER submissions through its webservice.

One additional, practical reminder: Minnesota’s Retail Delivery Fee is reported as its own line item on the return.

Feeling buried under multi-state filings? SalesTaxSolutions.US offers streamlined, subscription-based filing services—no long-term contracts, no surprise fees, just clean compliance.

When Are Sales Tax Returns Due in Minnesota?

Minnesota, like many states, assigns filing frequencies based on tax liability. The more average tax you report, the more often you file. When registering for a sales tax account, you will be required to estimate which filing frequency applies to your business.

Each Minnesota filing frequency—monthly, quarterly, and annual—is associated with a different average tax liability. See the graphic below for a breakdown.