Sales Tax Articles
Sales Tax State Activity Update - June 2007
Minnesota Takes Taxability to the Cleaners
The Minnesota Department of Revenue recently revised the Sales Tax Fact Sheet that gives taxability guidance with respect to laundry and cleaning services.
Examples of taxble services are laundry, dry cleaning, lien and supply, drapery, upholstery, leather and industrial cleaning. Tax must be charged on the full selling price. Fees imposed under the Dry Cleaner Environmental Response and Reimbursement Law that are passed on to the customer as part of the laundry and dry cleaning services are taxable even if separately stated.
Sales made through self-service coin operated laundry and dry cleaning machines are exempt. Sales of soap and other cleaners for use in self-service machines are taxable.
Examples of nontaxable services are pressing, clothing alterations, storage of clothing, diaper services, smoke and water damage cleaning of clothing and liens.
Taxpayers providing taxable laundry and dry cleaning services should give suppliers a completed Certificate of Exemption, Form ST-3 when purchasing supplies used in providing the services.
Exemption code M, "Materials to provide taxable services" should be marked on the certificate. Exemption code N should be marked on Form ST-3 when claiming an exempt percentage of fuels or other energy sources used in providing the taxable services. No exemption is provided for tools, accessories and equipment used to provide laundry and dry cleaning services.
The full fact sheet can be viewed Minnesota Department of Revenue website. (PDF)
(Minnesota Sales Tax Fact Sheet 120, May 01, 2007)
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