If found some of these rules about sales tax in Minnesota to be fascinating. The tax code is definitely not straight forward! As part of its annual tax survey, the Minnesota Society of Certified Public Accountants MNCPA asked its CPA members to share examples of the more quirky sales and use tax rules in the state.
MNCPA member Scott Kadrlik, CPA, partner at Meuwissen, Flygare, Kadrlik & Associates, P.A. in Eden Prairie, who also works as a stand-up comedian, offers a lighthearted view of some of the examples CPAs shared.
- Twix or Snickers? Candy bars containing flour are not taxable, while those that do not contain flour are taxable. “So, how much tax is there on a 100 Grand® bar?”
- What are you going to make with that fabric? Fabric purchased to create a garment is not taxable. Fabric purchased to create anything else? Taxable. “These are not my new drapes; this is my ball gown. Just ignore the curtain rod.”
- Men don’t accessorize. Men’s belts fall into the category of “clothing” and as such are not taxable. Belt buckles sold separately, however, are considered “accessories” and are taxable. “Thank goodness they don’t tax men’s belts. Guys don’t need another reason to let their pants hang down to their knees.”
- Need to rent a locker for your Wednesday night bowling league? If the locker is permanently attached to the building, its use is not taxable. Not attached? Taxable. “This one makes no sense, but taxing the smelly bowling shoes inside of the locker makes perfect sense.”
- Mismatched window treatment. Shutters purchased to attach to the sides of a window are not taxable. Conversely, blinds that attach to the top of a window are taxable. ”They should reconsider taxing blinds. After all, you provide a great public service for your neighbors when you use them.”
- The plight of the housekeeper. Hiring a housekeeper to wash dishes, make beds, dust and pick up is not taxable. But hiring a housekeeper to clean floors and bathrooms is taxable. “They wash dishes? Isn’t that just one of the duties you perform the night before the housekeeper comes so they don’t think you’re a complete slob?”
- Technology taxes. Labor to repair computer equipment or reinstall software is not subject to sales tax. Labor to set up your computer and/or to install new software is taxable. “So, we tax only some of the geeks?
- Changes with the seasons. Snowplowing is not taxable, while landscaping and lawn mowing are taxable. “That explains Minnesota’s two seasons: winter and Fourth of July.”
- Real or fake? The purchase of a faux fur coat is not taxable. Purchasing a real fur coat, on the other hand, is taxable. “The foxes, chinchillas and mink will storm the Capitol, demanding equal treatment.”
- Do you plan to attend in person? Workers in Minnesota won’t pay sales tax when they attend a continuing professional education seminar or class in person. Learn the same material online via a webcast or webinar? It’s taxable. “Nothing beats face-to-face training, unless of course you’re attending a class I teach.”
The Minnesota Society of Certified Public Accountants (MNCPA) serves the public interest by advancing the highest standards of ethics and practice within the CPA profession. Visit us at www.mncpa.org .
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