Minnesota: Sales Tax Handbook
How to file your sales taxes in Minnesota
Once your business has a Minnesota sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the Minnesota government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
How To Collect Sales Tax In Minnesota
If the seller has an in-state location in the state of Minnesota, they are legally required to collect sales tax at the tax rate of the buyer's location, as Minnesota is a destination-based sales tax state.
If the seller's location is out of state, then the same policy applies: the state of Michigan still requires the seller to charge the sales tax rate of the buyer's location.
Sales Tax Collection Discounts In Minnesota
While many states allow merchants to keep a small percentage of the sales tax they collect as a collection discount, or compensation for the work put in collecting the tax on behalf of the state, Minnesota does not currently allow this.
Your Minnesota Sales Tax Filing Requirements
To file sales tax in Minnesota, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
In the state of Minnesota, all taxpayers have three choices, for filing their taxes. One option is to file online by using the Minnesota Department of Revenue. This online system can also be utilized to remit the payment. It must be noted that if your business has a sales and tax liability of greater than ten thousand dollars within the state's fiscal year, all taxes must be paid electronically(this begins with the following calendar year). The online system Autofile can also be utilized to both file and pay your business's taxes online. The final option is filing over the phone. This is done by touch tone phone.
Tax payers in Minnesota should be aware of late penalties the state applies. The penalty for late paying is 5% for up to thirty days late, 10% for up to sixty days late, and 15% if the payment is more than 60 days late. An additional 5% is added to any owed percentage if the return is filed late.
The state of Minnesota requires that a seller who owns a sales tax permit files sales tax return on the required day, so long as the tax return would have been "zeroed-out", and there is nothing to report.
Your Minnesota Sales Tax Filing Frequency & Due Dates
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of Minnesota sales tax filing due dates.
Where To File Your Minnesota Sales Tax Return:
Filing Your Minnesota Sales Tax Returns Online
Minnesota supports electronic filing of sales tax returns, which is often much faster than filing via mail.Online filing of sales tax returns is required, unless the taxpayer's religious beliefs prohibit the use of electronics.
Minnesota allows businesses to make sales tax payments electronically via the internet.Taxpayers whose sales and use tax liability exceeds ten thousand dollars during the prior year (fiscal year, which should end on June 30) must make all of the payments for periods in the following calendar years by EFT, unless they are specifically prohibited by their religious beliefs.
You can process your required sales tax filings and payments online using the official Minnesota e-Services System website, which can be found here . You should have received credentials to access your Minnesota e-Services System account when you applied for your Minnesota sales tax license.
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