Step-by-step process for filing sales tax in Minnesota
Let’s get right into the steps for filing sales tax in Minnesota. We’ll start with creating an account first. If you already have an account with the Minnesota DOR, skip to step 2.
Step 1: Create an online account
To begin filing your Minnesota sales tax return, you'll need to register for a sales tax permit and create an account on the Minnesota Department of Revenue's e-Services website. This can be done entirely online, and once you've completed the registration process, you'll receive your login credentials.
Creating an online account is a straightforward process.
You'll need to provide some basic information about your business, such as its legal name, address, and the type of goods or services you sell.
You'll also need to provide your personal information, including your name, address, and Social Security number or Individual Taxpayer Identification Number (ITIN).
Once you've submitted your registration, the Department of Revenue will review your application and, if approved, issue you a sales tax permit and login credentials for the e-Services website. Keep these login credentials safe, as you'll need them each time you file your sales tax return.
Step 2: Login into your account
With your login credentials, sign in to the Minnesota Department of Revenue's e-Services website. Once you've logged in, you'll be directed to your account dashboard.
Take a moment to familiarize yourself with the dashboard layout. This will serve as your home base whenever you need to file a sales tax return or manage other aspects of your sales tax account. The dashboard provides an overview of your account status, including any upcoming filing deadlines and any correspondence from the Department of Revenue.
Be sure to explore the various tabs across the center of the page. The "Correspondence" tab is particularly important, as this is where you'll find any messages or letters from the state regarding your sales tax account.
Step 3: Start your tax return
You must select the appropriate account from your dashboard to file a sales tax return. Once you've selected the correct account, you'll see a list of all the periods for which you've previously filed returns and any periods for which a return is due.
If you have a return due, look for the "File Return" link to the right of the corresponding period. Click this link to begin the process of filing your return.
Step 4: Enter tax details
The Minnesota sales tax return is one of the more lengthy returns among the states, so it's important to take time and enter your information carefully.
On the first page, you can import or manually enter your data. For this guide, we'll use the manual entry process. Click "Next" at the bottom of the page to proceed.
At the top of the next page, you'll see a box labeled "Enter Gross Receipts." This is where you'll enter your total gross sales for the filing period. Once you've entered your gross sales, you must again enter that amount under code 100, "General Rate Sales Tax." This ensures that you're accurately reporting and paying the sales tax you owe to the state.
If you have any use tax liability for the filing period, you'll need to enter that amount under code 200, "Use Tax Purchases." Use tax is a tax on purchases made from out-of-state sellers who don't collect Minnesota sales tax. You may owe use tax if you buy goods or services for use in Minnesota from a seller who doesn't collect Minnesota sales tax.
It's important to note that if you don't already have the necessary lines for reporting your sales and use tax, you'll need to add them to your return. This process can be time-consuming, as you'll need to find the appropriate jurisdiction from a drop-down menu. Minnesota does not simply allow you to type in the code related to the jurisdiction.
Once you've entered all your sales and use tax information, take a moment to double-check your entries for accuracy. When you're satisfied that everything is correct, click "Next" to proceed.
Step 5: Submit payment
You can do so on the next screen if you wish to pay the tax due when filing your return. Simply select "Yes" when prompted.
On the payment screen, you must enter your bank account and routing numbers. Triple-check these numbers to ensure accuracy, as a mistake could result in a failed payment or funds being withdrawn from the wrong account.
Enter the amount you wish to pay (typically the full amount due) and select the appropriate due date. To avoid potential penalties and interest, you must schedule your payment on or before the due date for your sales tax return.
Once you've carefully reviewed all your payment information, click "Next" to proceed. On the following page, click "Submit" to complete your payment and file your return.
Step 6: Finalize filing
Congratulations! You've now successfully filed your Minnesota sales tax return and, if applicable, submitted your payment.
If you forgot to print or save a copy of your return for your records, don't worry. You can easily view or print a copy of your filed return anytime.
Simply navigate to your account dashboard, select the "Sales & Use Tax" account, and choose the period for which you need a return copy. Look for the "Period Activity" section, where you'll find a link to view and print your return.
Local sales tax rates in Minnesota
Here are the current sales tax rates for some major cities in Minnesota:
Filing Sales Tax in Minnesota FAQs
What is the frequency of sales tax filing in Minnesota?
The frequency of sales tax filing in Minnesota depends on your sales volume. You may be required to file monthly, quarterly, or annually. The Minnesota Department of Revenue will assign your filing frequency based on your sales tax liability.
Can I file my Minnesota sales tax return by mail?
Yes, you can use the paper forms provided by the Department of Revenue to file your Minnesota sales tax return by mail. However, electronic filing through e-Services is encouraged for faster processing and convenience.
Do I need to file a sales tax return in Minnesota if I didn't make any sales?
Yes, if you have an active sales tax permit in Minnesota, you must file a return for each reporting period, even if you had no sales or owe no tax. You would file a "zero return" in this case.
Is SaaS taxable in Minnesota?
No, Minnesota does not tax SaaS products.
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