New Twin Cities Metro-Wide Sales and Use Taxes

August 23, 2023 by Jack Siegle
State and Local Taxation, Tax Services

Effective October 1, 2023, the local sales and use tax for the seven-county metro in Minnesota will increase by 1%.  The seven counties that this will impact are Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. The 1% total increase to the current sales tax will be used to support housing and transportation projects, with 0.25% of that going to housing projects in the metro area and 0.75% to transportation projects in the metro area.

These two new rates apply to all taxable sales where customers receive the taxable product within the seven counties.  There has been some confusion with people incorrectly thinking the new taxes apply only to the housing and transportation industries transactions.  This is incorrect – this is just what the increased taxes collected will be used for.  These taxes apply to all taxable sales in the seven-county metro area.

Minnesota has recently mailed notices regarding these new metro wide sales and use taxes, so now is a good time to review your local sales and use tax practices.  Minnesota counties and cities have added local sales taxes at various times during the last few years without a lot of fanfare.  If you are delivering to customers’ locations, we recommend you verify the tax rate(s) you are charging.

You can use a tool on the Minnesota Department of Revenue website to determine the tax rate for a specific location using either the map or address lookup  Please note the rates on the website are the current tax rates – they do not yet include the newest taxes, since they do not go into effect until October 1, 2023.

New retail delivery fee statewide – starting July 1, 2024:

Effective July 1, 2024, there will be a new retail delivery fee of 50-cents on each transaction of $100 or more on many retail deliveries in Minnesota.  Businesses with less than $1 Million in retail sales in the prior calendar year will not be required to collect this fee.  The fee will not apply to the delivery of food, medical drugs, baby products, and some other items. The fee must be identified on invoices with certain wording.  This will go into effect July 1, 2024, so look for more information to come about this change. 

Please contact your Copeland Buhl representative if you have any questions or wish to learn more about these updates.