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Did You Know? There’s a New Transit Sales and Use Tax for Certain Minnesota Counties

January 27, 2016

In the November 2015 elections, the following Minnesota counties voted to implement a Transit Sales and Use Tax of 0.5 percent effective April 1, 2016: Blue Earth, Brown, Cass, Chisago, Crow Wing, and Wabasha.

As a result, all companies that are registered to collect Minnesota sales tax and are making sales or providing services in these counties must charge for and collect the additional tax.

About the Transit Sales and Use Tax

Transit tax is considered a local sales tax and is administered by the Minnesota Department of Revenue. Local sales tax applies only to sales made or services performed within city limits or county boundaries. Keep in mind this includes sellers outside the locality who ship or deliver property to the locality in their own vehicles, and/or those who have an office or representative within the locality. All retailers who are registered to collect Minnesota sales tax and are doing business in an area with local tax must also collect the local tax.

Actions to Take if You’re Affected

In addition to charging for and collecting the additional tax, remember to update your software as of April 1, 2016, to charge the sales tax. You’ll also need to add this tax to your Minnesota Department of Revenue e-file service account.

Where to Learn More

The Minnesota Department of Revenue has included detailed information on Fact Sheet 164 that identifies 2016 updates for local taxes—click here to read it. The Department has several fact sheets to assist you in the complicated area of sales tax. For the complete directory, click here.

Don’t Forget—We’re Here to Help!

If you have questions or are unsure of how the new Transit Sales and Use Tax may affect you, please don’t think twice about giving us a call.

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