Minnesota Sales Tax on Software and Digital Products Minnesota: Sales Tax Handbook

Minnesota:

Are Software and Digital Products subject to sales tax?

While Minnesota's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of software and digital products in Minnesota, including canned software - delivered on tangible media, canned software - downloaded, custom software - delivered on tangible media, custom software - downloaded, customization of canned software and digital products. To learn more, see a full list of taxable and tax-exempt items in Minnesota.


Canned Software - Delivered on Tangible Media
TAXABLE
Sales of canned software - delivered on tangible media are subject to sales tax in Minnesota.

Canned Software - Downloaded
TAXABLE
Sales of canned software - downloaded are subject to sales tax in Minnesota.

Custom Software - Delivered on Tangible Media
EXEMPT
Sales of custom software - delivered on tangible media are exempt from the sales tax in Minnesota.

Custom Software - Downloaded
EXEMPT
Sales of custom software - downloaded are exempt from the sales tax in Minnesota.

Customization of Canned Software
TAXABLE
In the state of Minnesota, all separately stated charges incurred for the modifications to canned software which was prepared specifically for a certain customer are considered to be exempt, but only to extent of modification.

Digital Products
TAXABLE
In the state of Minnesota, the digital products are considered to be taxable. However, any digital textbooks or instructional materials intended for students is considered to be exempt. In addition, presentations which are accessed as digital audio and audiovisual works are also considered to be exempt.



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Source: http://www.salestaxhandbook.com/minnesota/sales-tax-taxability/software-and-digital-products