Minnesota businesses are responsible for collecting both state and local sales and use tax. Each business selling taxable products or services must first register with the Minnesota Department of Revenue and local tax offices. The business then remits the Minnesota sales tax to the Department of Revenue and some local governments.
Incorporate or file other necessary business documents with the Minnesota Secretary of State. These business entities must file with the Secretary: cooperatives, limited liability partnerships, limited partnerships, limited liability companies and corporations. When filing a new Minnesota business entity with this office, you choose an official business name. Use that same name when registering for Minnesota sales, use and other types of business taxes.
Pay a visit to the IRS.gov website to figure out if you have to apply for a federal employer identification number. An EIN number is mandatory for companies with employees and certain other businesses or charities. For example, all tax-exempt nonprofit organizations need to apply for an EIN number. On the website, you can see a search box near the top of each page. Use that to search for “EIN registration requirements.”
Familiarize yourself with the Minnesota sales tax laws by using the “Minnesota Sales and Use Tax Instruction Booklet” (see sources below). This booklet will tell you if your products or services are subject to sales tax, what kinds of Minnesota tax exemptions apply, how to figure the Minnesota tax rate and additional information on sales and use tax in Minnesota.
Register for a Minnesota sales tax license. To do this, the Department of Revenue has an online Minnesota business tax registration system. Visit the home page at https://www.mndor.state.mn.us/tp/MN_xwTapReg.aspx. In addition to Minnesota sales tax, you can register for business income tax and many other types of Minnesota taxes for business.
Contact your local tax authority to register for any existing local Minnesota sales taxes. You will get the registration forms from the local office. You will then need to figure the combination of the state and local sales taxes so you can collect the proper amount of tax from your customers. You can also use the Minnesota sales tax rate calculator at taxes.state.mn.us/taxcalc/pages/index.aspx.
Report and pay your Minnesota taxes. You may use the e-File Minnesota system at https://www.mndor.state.mn.us/ur/jsp/Login.jsp to pay sales taxes and other business taxes online.
Minnesota Sales and Use Tax Instruction Booklet