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Starting October 1, 2023, there will be two new metro county area sales and use taxes dedicated to transportation and housing. The new Metro Area Sales and Use Tax for Housing rate will be 0.25% and the Metro Area Sales and Use Tax for Transportation rate will be 0.75%. The total increase in the metro area sales tax will be 1% and the Minnesota Department of Revenue will administer this tax.
The 1% sales tax applies to retail sales made into any of the following counties: Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties. The use tax applies to taxable items used in any of the following counties: Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties if the local sales tax was not paid.
Who Must Collect the Tax:
All retailers who have a taxable presence (nexus) in any of the following counties: Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington Counties, even if they're an out-of-state retailer or marketplace, and are registered for Minnesota sales and use tax. This includes all sellers outside Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington Counties if they have a taxable presence such as:
- Have an office, distribution, sales, sample or warehouse location, or other place of business in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington Counties, either directly or by a subsidiary.
- Perform taxable services in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington Counties.
- Ship taxable items into Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington Counties, including all sales made using the internet, mail order, or telephone.
- An out-of-state retailer that exceeds Minnesota sales tax thresholds and make sales into Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington Counties.
These tax increases were included in the Housing Omnibus and Transportation Omnibus bills respectively, passed during the 2023 Minnesota Legislative session. They join a number of new taxes passed including a 10% cannabis gross receipts tax that took effect on July 1, 2023, and a new Delivery Tax that will begin July 1, 2024.
For more visit: www.revenue.state.mn.us/tax-law-changes
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