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Minnesota provides a sales tax exemption for fuels, electricity, gas, and steam used in the agricultural production process, including those utilities used to ventilate facilities housing agricultural production animals. (Revenue Notice No. 07-01, Minnesota Department of Revenue, March 5, 2007)


Beginning in 2006, vendors holding contracts to provide goods or services to the Minnesota Department of Administration and the Minnesota Legislature must have a tax business identification number to indicate that they are registered to collect sales tax in the state. Contracts with vendors lacking the registration will be canceled, unless in the event of an emergency, when the vendor is the state’s only channel to the good or service in question, or when it is in the state’s best interest. (2005 MN H 138 a)


Voice over Internet Protocol (VoIP) services are subject to Minnesota sales and use tax as a telecommunications service. VoIP is not an exempted information service since it uses computer processing applications solely for the management, control, or an operation of a telecommunications system or management of a telecommunications service (Revenue Notice No. 05-03, Minnesota Department of Revenue, May 31, 2005).


In a step toward conforming to the Streamlined Sales and Use Tax Agreement, Minnesota has repealed Rule 8130.0800 relating to meals and drinks and has amended Rule 8130.4700. Effective May 7, 2005, Rule 8130.4700 addresses soft drinks and candy, which are taxable if prepared by the seller or sold through a vending machine. The rule also addresses the taxability of meals served in a hospital, nursing home, correctional facility and like institutions, meals served at schools, meals incidental to educational programs, and meals provided to employees. These meals are exempt when purchased or sold by qualifying facilities. Finally, the rule addresses purchases of equipment and products used in the business by vendors of meals and drinks, the majority of which are taxable, with a specific exclusion for food products and nonreusable items such as napkins and straws. (Rule 8130.0800, Rule 8130.4700, Minnesota Department of Revenue, effective as noted above.)


The Minnesota Department of Revenue has recently issued modifications to Revenue Notice 1991-06. This notice deals with the taxability of isolated or occasional sales. The modifications to the notice state that sales of tangible personal property primarily used in a trade or business do not qualify for the isolated or occasional sales tax exemption. The Revenue Notice further defines a trade or business as any activity carried on for the production of income from selling goods or performing services. There are some exceptions to this notice. As stated in modifications, the following sales of assets used in a trade or business may qualify for the exemption: (1) if the sale occurs in a transaction subject to or described in specified Internal Revenue Code Sections; (2) the sale is between members of a controlled group as defined in IRC Section 1563(a); (3) the sale is a sale of farm machinery; (4) the sale is a farm auction sale; (5) the sale is a sale of substantially all of the assets of a trade or business; or (6) the sales of trade or business property made during the month of the sale and the previous 11 calendar months does not exceed $1,000 the sale may still be eligible for the exemption. (Revenue Notice 91-06, Minnesota Department of Revenue, December 20, 2004)



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