How to Get Minnesota Sales Tax Permit

Have you ever wondered what a sales tax permit is in Minnesota? If you don’t, then we will guide you through it. In Minnesota, a sales tax permit, also known as a seller’s permit, is a legal document that allows businesses, specifically Minnesota LLC, to collect and remit sales tax to the Minnesota government. This permit ensures businesses operate legally and have the necessary permissions to conduct sales within a particular state. Minnesota has its own rules and regulations surrounding sales tax permits. Business owners must familiarize themselves with the requirements and processes to comply with the law.

In this comprehensive guide, Webinarcare Editorial Team will walk you through everything you need to know about obtaining and maintaining Minnesota Sales Tax Permit. From understanding the basics of sales tax to the intricacies of the application process, we have got you covered. You must be guided by all the factors gathered in this article.

How to Get Sales Tax Permit in Minnesota

On this page, you’ll learn about the following:

What is a Sales Tax Permit?
- Who Needs a Sales Tax Permit?
How to Get a Sales Tax Permit in Minnesota
How to Maintain a Sales Tax Permit
Penalties for Non-Compliance
FAQs

What is a Sales Tax Permit?

A sales tax permit is Minnesota-issued license that allows businesses to collect and remit sales tax on the goods and services they sell. This permit ensures Minnesota businesses operate legally and have the necessary permissions to conduct sales within a particular state. In Minnesota, a sales tax permit is required for businesses that sell taxable goods or services and are required to collect sales tax from their customers.

Who Needs a Sales Tax Permit?

Not all businesses need a sales tax permit. Typically, businesses that sell tangible personal property or taxable services to customers within Minnesota require a sales tax permit. This includes brick-and-mortar stores, online retailers, and service providers. Minnesota may also require sales tax permits for businesses that sell certain types of products or services, such as alcohol or tobacco. If you plan to start a bakery business in Minnesota, you typically need a sales tax permit to collect and remit sales tax on the items you sell.

If your business operates in multiple states or forms a foreign LLC in Minnesota, you may need to obtain a sales tax permit for each state with a sales tax nexus. A sales tax nexus is a connection or presence a business has within a state that requires them to collect and remit sales tax. Factors that can create a nexus include the following:

Physical location
Employees
Inventory within a state

Obtaining a sales tax permit in Minnesota is not just about complying with regulations, but about seizing the opportunity to grow and thrive in the market. To start an LLC must be a gateway to establish a legitimate business presence and to build trust with customers. Embrace this essential step, for it paves the path towards success and prosperity.
– WEBINARCARE EDITORIAL TEAM

How to Get a Sales Tax Permit in Minnesota

The process for obtaining a sales tax permit varies from state to state. Generally, Minnesota businesses must apply through the Minnesota Department of Revenue. The following steps provide an overview of the application process:

Step 1: Determine If You Need a Sales Tax Permit

Before applying, determine if your Minnesota business needs a sales tax permit based on the goods or services you sell and where you operate.

Most Minnesota businesses that sell tangible goods or services must have a sales tax permit. This includes:

Retailers – businesses that sell goods directly to consumers, such as clothing stores, grocery stores, and electronics stores.
Service Providers – businesses that provide services, such as hair salons, auto repair shops, and landscaping companies.
Wholesalers – businesses that sell goods to other businesses, such as distributors and manufacturers.
Online Sellers – businesses that sell goods or services online, including Minnesota E-commerce and online marketplaces.

Step 2: Register Your Minnesota Business

Register your business in Minnesota if you still need to. This may involve obtaining an Employer Identification Number (EIN) in Minnesota from the Internal Revenue Service and registering your business name with the Minnesota Secretary of State.

Your Minnesota business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Minnesota Business Name Search for a proper Minnesota business name. You can also check the availability of your desired business name by searching the Minnesota Secretary of State Business Filings Online‘s website.

In obtaining an EIN, it can be done through the following:

Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Complete the registration for a legal Minnesota business if you plan to sell tangible goods.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –
LegalZoom – ($0 + State Fee for LLC formation)

Step 3: Gather The Necessary Information

The next step is to collect the required information for the Minnesota sales tax permit application. To obtain a sales tax permit in Minnesota, you will need to gather the following necessary information:

Business Details: Provide the legal name, mailing address, and contact information of your business, including your Minnesota DBA (Doing Business As) names.
Entity Type: Indicate whether your business is a sole proprietorship, partnership, corporation, LLC, or legal entity.
EIN/SSN: Have your Employer Identification Number (EIN) or Social Security Number (SSN) ready. This identification is required to associate the sales tax permit with your business.
Purpose of Permit: Explain the nature of your business activities, such as retail sales, wholesale, manufacturing, or service, to determine the appropriate sales tax category.
Product/Service Description: Provide a brief description of the goods or services your business offers, including any unique details that may impact the sales tax requirements.
Nexus Information: Identify if your business has a physical presence or nexus in Minnesota, such as a brick-and-mortar location, employees, or inventory storage.
Estimated Sales: Estimate your expected monthly or annual sales volume in Minnesota to determine the appropriate tax registration and reporting requirements.
Previous Registration: If you are already registered for sales tax in another state, provide details to determine if any reciprocal agreements or exemptions apply.
Supporting Documents: Some states may require additional documentation, such as a copy of your business license, federal tax returns, or a certificate of authority.
Fee Payment: Be prepared to pay the required fee for obtaining a sales tax permit in Minnesota.

It’s important to note the exact requirements and processes in Minnesota. It is recommended to visit the official website of the Minnesota Department of Revenue or consult with a tax professional for accurate and up-to-date information.

Step 4: Complete The Application

Fill out the sales tax permit application form for Minnesota, either online or by paper. Be prepared to answer questions about your business operations, products, and services. You can register your Minnesota sales tax permit in Business Tax Registration.

Step 5: Pay Any Required Fees

In Minnesota, the state permit may charge a fee for obtaining a sales tax permit. Be prepared to pay this fee when submitting your application. Usually, it costs $0 (Free).

Step 6: Submit The Application

Submit your completed application, along with the required fee of $0 (Free), to the Minnesota Department of Revenue.

Step 7: Receive Your Permit

Once your application is approved, you will receive your sales tax permit. This may be a physical document or an electronic certificate you can print.

How to Maintain a Sales Tax Permit

After obtaining a sales tax permit, Minnesota businesses must maintain compliance with Minnesota sales tax laws. This typically involves the following steps:

Collect Sales Tax: Collect sales tax from customers on taxable goods and services. Be sure to charge the correct sales tax rate based on your and your customer’s locations. The sales tax rate in Minnesota is 6.875%.
Keep Accurate Records: Maintained detailed records of all sales transactions, including the amount of sales tax collected. This information will be required when filing your sales tax returns. Hire a certified public accountant (CPA) to keep track of records.
File Sales Tax Returns: File sales tax returns with Minnesota, typically monthly, quarterly, or annually, depending on your sales volume and Minnesota requirements. Be sure to remit the sales tax collected during the reporting period.
Renew your Permit: Minnesota requires businesses to renew their sales tax permits periodically. Know your state’s renewal requirements and complete the necessary steps to maintain your permit.

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Penalties for Non-Compliance

Failure to obtain or maintain a sales tax permit can seriously affect a business. Penalties for non-compliance can include fines, penalties, interest charges, and even the revocation of your business license. Additionally, Minnesota businesses that fail to collect and remit the Minnesota sales tax may be held personally liable for the unpaid taxes.

Do I Need a Sales Tax Permit If I Only Sell Online?

You likely need a sales tax permit if you sell taxable goods or services online and have a sales tax nexus in Minnesota. To have a Home-Based Business in Minnesota, you must still file and maintain a sales tax permit.

How Long Does Obtaining a Sales Tax Permit Take?

The processing time for sales tax permit applications takes time. In Minnesota, they may issue permits within a few days, while others may take several weeks. Be sure to apply well in advance of when you plan to start selling taxable goods or services.

Can I Have Multiple Sales Tax Permits?

Businesses that operate in multiple states or sell different types of products may need multiple sales tax permits. Be sure to research the specific requirements for each state and product type. Having a foreign LLC is not quite easy since you still need to hire a Registered Agent, file for the Articles of Organization of the state you wish to operate your business, and also, you need to have multiple sales tax permits.

How Much Does a Sales Tax Permit Cost?

The costs and requirements for obtaining a sales tax permit vary depending on the state. To find accurate information about the cost of a sales tax permit in Minnesota, you can visit the Minnesota Department of Revenue’s website or consult with a tax professional or accountant familiar with your state’s regulations. They can provide the most up-to-date information on the costs and requirements for obtaining a sales tax permit in Minnesota.

FAQs

What is a sales tax permit and why do I need one in Minnesota?

A sales tax permit is a legal authorization from the state of Minnesota to sell taxable goods or services and collect sales tax from buyers.

Who needs to obtain a sales tax permit in Minnesota?

Anyone who sells taxable goods or services in Minnesota is required to obtain a sales tax permit.

How can I check if my business needs a sales tax permit in Minnesota?

You can check the Minnesota Department of Revenue website or contact their customer service hotline to determine if your business needs a sales tax permit.

What is the sales tax rate in Minnesota?

The sales tax rate in Minnesota varies by location, with a base rate of 6.875%. Additional local taxes may apply.

Do I need a separate sales tax permit for each location where I sell goods or services in Minnesota?

Yes, you must obtain a separate sales tax permit for each location where you sell taxable goods or services in Minnesota.

Is there a fee to obtain a sales tax permit in Minnesota?

No, there is no fee to obtain a sales tax permit in Minnesota.

How long does it take to obtain a sales tax permit in Minnesota?

It typically takes 2-3 business days to obtain a sales tax permit in Minnesota after you have submitted your application.

How do I apply for a sales tax permit in Minnesota?

You can submit your application online through the Minnesota Department of Revenue website or by mail.

What information do I need to provide when applying for a sales tax permit in Minnesota?

You will need to provide basic information about your business, such as your business name, address, and tax identification number.

Can I apply for a sales tax permit in Minnesota if I don’t have a physical location in the state?

Yes, if you sell taxable goods or services in Minnesota and meet other criteria, you are still required to obtain a sales tax permit.

How often do I need to renew my sales tax permit in Minnesota?

Your Minnesota sales tax permit does not expire and does not need to be renewed.

Can I use my sales tax permit from another state in Minnesota?

No, you must obtain a separate sales tax permit to sell taxable goods or services in Minnesota.

How often do I need to file sales tax returns in Minnesota?

You must file sales tax returns in Minnesota on a regular basis, typically monthly or quarterly.

How can I file my sales tax returns in Minnesota?

You can file your Minnesota sales tax returns online through the Minnesota Department of Revenue website or by mail.

What happens if I fail to obtain a sales tax permit in Minnesota?

If you sell taxable goods or services in Minnesota without a sales tax permit, you may be subject to penalties and fines.

Can I register for a Minnesota sales tax permit if I have unpaid taxes from a different state?

No, you must resolve any outstanding tax liabilities with other states before applying for a Minnesota sales tax permit.

Do I need to charge sales tax on services in Minnesota?

Some services are taxable in Minnesota, such as pet grooming and lawn care. You should consult with the Minnesota Department of Revenue to determine if your services are subject to sales tax.

Are there any sales tax exemptions in Minnesota?

Yes, there are a variety of exemptions available for certain types of goods and services in Minnesota.

Can I set up a payment plan with the Minnesota Department of Revenue for past-due sales taxes?

Yes, you may be able to set up a payment plan with the Minnesota Department of Revenue under certain circumstances.

How can I receive assistance with obtaining a sales tax permit in Minnesota?

You can contact the Minnesota Department of Revenue’s Business Registration assistance team for help with your sales tax permit application.

Do I need to display my sales tax permit in my business?

Yes, you must display your Minnesota sales tax permit in a prominent location where it can be easily seen by customers.

What happens if I move my business to a different location in Minnesota?

You will need to obtain a new sales tax permit for your new business location in Minnesota.

Can I use my Minnesota sales tax permit to sell goods or services in other states?

No, you must obtain a sales tax permit in each state where you sell goods or services.

Are there any penalties for filing sales tax returns late in Minnesota?

Yes, there may be penalties and interest charged on late payments of Minnesota sales tax.

What should I do if I have questions about sales tax in Minnesota?

You should contact the Minnesota Department of Revenue customer service hotline or visit their website for more information about sales tax in Minnesota.

Can I add additional goods or services to my sales tax permit after I have obtained it in Minnesota?

Yes, you can add additional goods or services to your Minnesota sales tax permit by contacting the Department of Revenue and requesting an update to your permit.

What is the difference between the liability and non-liability sales tax permit in Minnesota?

Liability sales tax permit holders are required to pay sales tax each year, where non-liability permit holders aren’t.

Do I need to file sales tax returns even if I haven’t made any sales in Minnesota?

Yes, you still need to file a return in Minnesota even if you haven’t made any sales during the period.

Are there any circumstances where I can be held personally liable for sales tax in Minnesota?

Yes, in certain cases, such as credit card transactions, internet-based sales, and fraud.

Can I apply for a sales tax permit in Minnesota if I am a nonresident?

Yes, nonresidents can apply for a sales tax permit in Minnesota, but may have different requirements.

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Conclusion

Obtaining and maintaining a sales tax permit is crucial to running a compliant and successful business. By understanding the requirements and processes in Minnesota, you can ensure that your business collects and remits sales tax correctly and avoids any penalties for non-compliance. Consulting with a tax professional or Minnesota attorney is recommended to ensure that your Minnesota business meets all necessary sales tax requirements.

How to Get Minnesota Sales Tax Permit | A Comprehensive Guide