Changes in state sales tax laws this year include new or expanded exemptions, accelerated payment changes, updated provisions for local sales and use taxes, and more.
According to a summary by the Minnesota Department of Revenue (DOR), here are some of the sales tax-related law changes from the 2019 legislative session:
County fair sales
Starting July 1, sales made by a county agricultural society on the fairgrounds during its regularly scheduled county fair are exempt from sales tax.
Sales made before or after the county fair are not exempt.
Invasive aquatic plants herbicides
Herbicides used under an invasive aquatic plant management permit are also exempt, starting July 1. This only applies to herbicides labeled for use in water and registered with the Minnesota Department of Agriculture for use on invasive aquatic plants.
Also, herbicides must be purchased by lakeshore property owners, a lake association or a contractor hired to provide invasive aquatic plant management. A Form ST3 certificate of exemption is needed to claim the exemption.
Agricultural heritage tickets
Tickets or admissions to performances or events held by a nonprofit, agricultural heritage organization are exempt from sales tax.
To qualify for the exemption, the events must be organized on at least 115 acres; educate the public about rural history and farms in Minnesota; be sponsored and conducted exclusively by volunteers, employees and board members; and be consistent with the nonprofit’s tax-exempt purpose.
The State Legislature added provisions for a political subdivision to impose a local sales tax, including:
The political subdivision must provide a resolution listing at most five specific projects to be funded and their costs.
There must be documentation showing a clear regional benefit to people and businesses outside the taxing jurisdiction.
The Legislature must approve the local tax before the political subdivision can seek voter approval at a general election.
When the local tax ends, the DOR may retain and transfer part of any excess revenues to the state’s general fund.
Political subdivisions may not impose a motor vehicle excise tax in future legislation.
June accelerated payments
The June 2020 and 2021 accelerated payments will be 87.5 percent for taxpayers who have a sales and use tax liability of more than $250,000 in the state’s prior fiscal year (July 1-June 30). The June 2022 accelerated payment will reduce to 84.5 percent.
Marketplace providers and more
Starting Oct. 1, marketplace providers and remote sellers who solicit sales in Minnesota, but do not maintain a physical place of business in the state, must register, collect and remit Minnesota sales tax no later than 60 days after they either make or facilitate either 200 or more retail sales or retail sales totaling more than $100,000 into Minnesota during the 12-month period.
Other new provisions included changes to the lodging tax rates permitted in Minneapolis and St. Paul, exemptions for specific local construction projects, and expansion of an existing sales tax exemption at the Duluth Heritage Center to include an ice arena in Mound.
For more details, visit www.revenue.state.mn.us/2019-sales-tax-law-changes.