Have you purchased items for your Minnesota business, say on Amazon for example, and didn’t have to pay sales tax?  Did you know in those cases you’re required to pay Use Tax?

Use tax is a sales tax on the use of tangible personal property purchased outside one’s state of residence on taxable items that will be used, stored or consumed in one’s state of residence and on which no tax was collected at the time of purchase.  This applies to individuals and businesses alike.  Unlike sales tax, the buyer (either a business or individual) is responsible for remitting payment to your home state tax authority.

Examples of when you should pay use tax:

• Purchase an item in another state and bring that item into your home state
• Purchase something from someone not authorized to collect sales tax, such as buying a used computer monitor from someone on Craig’s List or a newspaper ad
• Purchase an item on the Internet without paying sales tax
• Purchasing items through mail-order catalogs and sales tax isn’t charged on the purchase

Use tax rules, like sales tax, vary from state to state.  For more in-depth information on Minnesota use tax, check out the following links:

• Tax Information
• Individual Use Tax
• Online and Out Of State Purchases