Minnesota Sales, Use, Income, and Employment Tax


Minnesota income tax generally follows federal income tax, but the interaction between these two independent sovereigns creates much complexity in tax procedure. For many medium-size businesses, Minnesota sales tax issues are often more important than income tax issues. Unlike the income tax provisions, which generally work harmoniously to ensure that income is taxed, sales tax provisions are often counter-intuitive, contradictory, and at times arbitrary. A slight distinction under the sales tax statutes may mean several hundred thousand dollars of tax and penalties to the uncounseled business.