Sales Tax Articles
Sales Tax State Activity Update - July 2006
Swatch Out! Minnesota "Bolts" Products on to Interior Design Services
The Minnesota Department of Revenue has published its position on interior design services.
In Revenue Notice # 06-06 the Department states that interior design services are taxable if they result in the sale of taxable goods or services from the same business that provides the interior design service, even if the design service fee is separately stated from the sale of the taxable item or service.
This means that when a business provides a client with design services and subsequently that business sells a taxable item or service to the client, then the business must charge sales tax on the entire sales price of the item or service, including the interior design service, if the interior design services are clearly tied to the sale of the items or service.
Interior design services are clearly tied to the sale of taxable goods or services if one of the following conditions is met:
The client orders the tangible personal property or taxable service within a year of receiving related design services; or
The client receives credit against the purchase of tangible personal property or taxable service for the design services that are paid for separately.
The Revenue Notice provides examples of taxable and non-taxable transactions and has an effective date of May 30, 2006.
View the full ruling on the Minnesota Revenue website.
(Revenue Notice No. 06-06, Minnesota Department of Revenue, 5/30/06)
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