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Reference Guide for Sales and Use Tax e-Services Webinar | January 2020 i

Reference Guide

Sales and Use Tax e-Services Webinar January 2020

This course is a live demonstration of e-Services related to Minnesota Sales and Use Tax. The webinar is designed for e-Services users including business owners, their employees, accountants, and bookkeepers who need working knowledge to meet their sales and use tax filing obligations.

ii Reference Guide for Sales and Use Tax e-Services Webinar | January 2020

Disclaimer

This reference guide is for educational purposes only. It is meant to accompany an oral presentation and not to be used as a standalone document.

This presentation is based on the facts and circumstances being discussed, and on the laws in effect when it is presented. It does not supersede or alter any provisions of Minnesota laws, administrative rules, court cases, or revenue notices.

If you have any questions, contact us at [email protected], 651-296-6181, or 1-800-657-3777 (toll-free).

Permission of the Minnesota Department of Revenue must be secured before exhibiting, reproducing, distributing or making any other use of any part of this reference guide.

Produced by the Minnesota Department of Revenue 600 North Robert Street, St. Paul, Minnesota 55146 ©Copyright 2020, Minnesota Department of Revenue, All Rights Reserved.

mailto:[email protected]

Objectives

After completing this course, you will be able to: • Update contact information to allow options when requesting a verification code.

• Apply local taxes to business activities when filing a sales and use tax return.

• Relate the file and pay process to business activities.

• Identify resources and tools on the department website.

Table of Contents

Part 1 – Verification Code and Managing Profile ................................................................................................................................... 1

Part 2 – Location Updates ...................................................................................................................................................................... 2

Part 3 – Local Sales Tax .......................................................................................................................................................................... 5

Part 4 – Sourcing Local Sales and Use Tax ............................................................................................................................................. 6

Part 5 – Resources ................................................................................................................................................................................. 8

Part 6 – Filing & Paying a Return .......................................................................................................................................................... 13

Reference Guide for Sales and Use Tax e-Services Webinar | January 2020 1

Part 1 – Verification Code and Managing Profile

Change Verification Code Preferences

The Manage my profile link allows the user to update login preferences, along with updating bank information, and managing third party access. We will focus on the Logon settings.

The Edit button allows the user to change information related to the verification codes, update contact information, or change security questions.

Update the email, cell carrier, and cell phone fields to the user’s specific personal information. This allows the user to have the option to select either preference upon log in for obtaining a verification code.

Notes:

2 Reference Guide for Sales and Use Tax e-Services Webinar | January 2020

A cell phone and an email address are required for the option to choose at log in how a code is sent. The Department of Revenue recommends to select Let me choose at log in.

Part 2 – Location Updates

When a business needs to add a second location, they must contact the Department of Revenue for assistance. When there are two or more locations registered for the business, the e-Services master is able to add additional locations within e-Services.

When updates are necessary to the business location, select the sales and use tax account link, then Manage Locations link. The locations related to the account are displayed. Select the location code link to edit the location.

Notes:

On June 21, 2018, the U.S. Supreme Court ruled in South Dakota v. Wayfair that physical presence is not required for sellers to be responsible for sales tax collection.

To make changes to the location, scroll to the bottom of the screen to view and select the Edit Location button.

Make updates in all required fields to correct the business information. The Location Name is a required field and is missing from this screen. When the business does not have the location name completed, make sure to edit the missing information before continuing.

The location address must be provided. To update the address of the business, change the information to the correct address.

Edit the existing sales locations when necessary to remove any local taxes, which are not required to be added to the sales and use tax return.

Notes:


This web page allows you to add any Special Local Taxes. You may also notice there is a link above the table titled Local Sales and Use Taxes. When you select the link, you navigate to Fact Sheet 164 – Local Sales and Use Taxes, which provides all local taxing areas with their rates.

You have the ability to use the Select All button to register for all general local sales and use taxes in Minnesota. The ability to choose the individual tax types is still available also; you may check individual boxes when applicable.

The Review screen allows the user to see the local and other taxes that were removed along with any local or other taxes that remain on the account. On this screen, it is necessary to select Submit to save and submit the requested changes.

Notes:

Part 3 – Local Sales Tax

We have information about local taxes on our website. To view this information, navigate to our website at revenue.state.mn.us. From the main page under Businesses, select Sales and Use Tax. Once you are on the Sales and Use Tax screen select Local Sales Tax Information. The accordion section expands, select the link Local Sales Tax Information.

The Sales Tax Rate Calculator helps you determine the correct amount of tax to charge in all locations within Minnesota. Enter a street address or nine-digit ZIP code to look up a rate on our website. Best for when you have one or two addresses at a time. The Tax Rate Calculator is tested and updated quarterly.

Notes:

http://www.revenue.state.mn.us/


The Sales Tax Rate Map allows you to look up a sales tax rate by zooming in and clicking on the map to select the location of a sale or by entering an address.

Part 4 – Sourcing Local Sales and Use Tax

Sourcing determines where a sale takes place and which taxes are imposed on the sale.

All sellers, regardless of their location, must collect Minnesota state and local sales taxes based on our sourcing rules. If you make sales into jurisdictions that have local sales taxes, you must collect those taxes. This may require you to register, collect, and remit additional local taxes along with the general rate.

Notes:

In example one, the business is physically located in St. Paul. A customer from Rochester comes in to a physical location in St. Paul and purchases a chair. In this example, the customer takes the chair with them when they leave, so the possession of the item was transferred at the physical location of the store. The tax assessed on the chair is the MN general rate sales tax plus any applicable local taxes for St. Paul.

Example two, the business is physically located in St. Paul. A customer from Rochester purchases a chair online and has it shipped to their home in Rochester. The tax assessed on this sale is MN General Rate sales tax and any applicable local taxes for Rochester, since possession of the item is transferred when the item is received by the customer at their home.

Notes:


Example three, there is a cellphone carrier located in Minneapolis. They have a customer with a billing address in Mankato. When the customer decides to download a new app to their phone or tablet they could be located anywhere, but the cellphone carrier does not know where exactly they are. Therefore, the only option they would have for assessing sales tax is the billing address. The sale is sourced to the customer’s billing address.

Part 5 – Resources

www.revenue.state.mn.us

We have information on our website relating to today’s webinar.

Notes:

Sales and Use Tax Information

Visit our website, select Sales and Use Tax on the homepage, under Businesses. You will find information about local tax requirements, along with other new topics related to sales tax. Fact sheets and industry guides are valuable tools as well.

Sales and Use Tax Education

We have additional courses offered in classroom and webinar formats to assist you with your sales and use tax questions. Go to our website, select the Sales and Use Tax link under Businesses, select Education, to expand the accordion section. We offer classes in person and by webinar. Some classes include Basic Sales and Use Tax and Sales and Use Tax for Manufacturers. Please visit our website for a complete listing of our classes, descriptions, and dates.

Notes:


We also have videos available to assist you with sales and use tax. See the Videos link for the e-Services Instructional videos. The topics include Adding Local Taxes, Adding a Location, Amending a Return, Filing a Zero Return, and Filing and Paying a Sales & Use Tax Return.

e-Services Help Page

Use the e-Services Help page for e-Services related questions. To view the Help page, select the Help link from the Menu dropdown.

Contact Us

Assistance that requires a phone call or email is available. Use the information below to contact us. Contact information is also available on our website.

Sales and Use Tax Contact Information

Notes:

Questions relating to your Sales and Use Tax Account activity?

Email: [email protected]

Prefer telephone assistance?

Call: 651-296-6181 or 1-800-657-3777 (toll-free)

Questions relating to Sales and Use Tax Law?


Other Contact Information

Business Income Taxes


Call: 651-556-3075

Withholding Tax


Call: 651-282-9999 or 1-800-657-3594 (toll-free)

Business Registration


Call: 651-282-5225 or 1-800-657-3605 (toll-free)

Notes:







Minnesota Department of Revenue Website revenue.state.mn.us GovDelivery Messages Subscribe to email updates on sales and use tax law changes, rules, fact sheets, and other related information.

• Choose the updates you want - by tax type and publication type

• Choose the frequency of notifications

Social Media

Connect with us on social media:

Follow our Facebook updates

Follow us on Twitter

Find employment opportunities on Linked In

Subscribe to our videos on YouTube

Notes:

http://www.revenue.state.mn.us/

Part 6 – Filing & Paying a Return

When a sales and use tax account is open a return is required for each period the business is active, even if that means filing a zero return. A zero return is a return filed when the business has no activity to report.

The information icons in e-Services alert the user when a period with a return is due or past due. The orange triangle with the exclamation mark indicates action is required on the period.

Note: The data and account information used for this presentation is fictious.

Gross Receipts

The total amounts the organization received from all sources during its accounting period, without subtracting any costs or expenses. Gross Receipts include taxable and non-taxable sales, exempt sales, leases, and rentals sourced in Minnesota. Do not include sales tax collected in Gross Receipts.

Do not enter commas, periods, or cents when entering amounts in e-Services. Use whole dollar amounts and round to the nearest whole dollar.

Notes:


General Rate Sales Tax

On line 100 enter the total taxable sales, leases, rentals, and services subject to Minnesota General Sales Tax in the Amount column. Do not include non-taxable sales or sales tax collected in the amount. Make sure to enter the taxable sales and not the tax collected.

Use Tax Purchases

Line 200 is the total purchases subject to Minnesota Use Tax. Use tax applies when you buy, lease, or rent taxable items or services used in your business without paying sales tax to the seller. Use tax may be due when you bring items into Minnesota or when you take items out of inventory. Use tax is also due if a seller does not charge Minnesota sales tax on taxable items.

Variable Rate Purchases

Line 210 is the total purchases subject to a variable rate. In the amount column enter the total purchases and calculate the tax due manually to enter the tax due in the tax due column.

Minnesota allows a credit for sales tax paid for items you use in Minnesota when some sales tax was paid to the seller. Use the variable rate to report use tax on purchases made when the seller only collected some sales tax and not the full General Rate of 6.875%.

Fact Sheet 146– Use Tax for Businesses has additional information related to Use Tax and the Variable Tax Rate for purchases.

Notes:

Local Tax Lines

All local taxes your business is registered for are displayed. If you do not need to use the local sales or use tax line, leave the tax line zero or you may delete the line from the return by selecting the red x for each line.

To add a local tax line to your return, select the Add a Tax Line link at the bottom of the list. Choose the desired local tax from the dropdown menu. This local tax line will now appear on future sales and use tax returns.

Deleting a tax line on the return will only delete the local tax from the specific return. The local tax lines will not be removed from the account or unregister the business from the local taxes. Use the Manage Locations link from the Sales and Use Tax Account page within e-Services to update local taxes on the account.

Example 1

Stop N Shop is a retail store located in Duluth, Minnesota. The City of Duluth is located in St. Louis County, and both the city and county have local taxes, which the Minnesota Department of Revenue administers. The Gross Receipts for the calendar year 2019 is $42,525; this includes some non-taxable clothing and taxable accessories. I calculated the taxable amount of $14,144. I enter this amount into the General Rate Sales Tax, line 100; and St. Louis County Transit Sales, line 328. On October 1, 2019, Duluth increased the sales tax rate from 1% to 1.5%. Taxable sales are calculated seperatly from the first three quarters of the year and the last quarter.

Notes:


On line 320, Duluth Sales I enter $3,111. The tax rate displays 1.5% to calculate the tax due for quarter four, 2019. I now need to add another tax line for the first three quarters of 2019 for Duluth at 1%. I enter the taxable sales for quarter one through three 2019, which is $11,033. From the dropdown option under the rate column I select 1%. The tax due automatically calculates in the Tax Due column. This will account for the tax rate of 8.875% for the sales in the City of Duluth.

Example 2

Winkelman Construction has use tax to report for the year. Mr. Winkelman buys materials that become part of real property in Winona, Minnesota. Mr. Winkelman purchased materials in Le Crescent, Minnesota where the tax rate is 6.875%; he then installed the materials into a house in Winona. The total amount of the purchases are $6,875. Since the general rate of 6.875% was already paid, Mr. Winkelman only needs to account for the local tax, Winona County Transit Use, because this is where the materials are installed. To report the additional local tax, I enter $6,875 in line 546, Winona County Transit Use. The tax due is calculated automatically within e-Services.

Notes:

Mr. Winkelman also purchased materials of $45,564 from Wisconsin during the year, which has a tax rate of 5.5%. Mr. Winkelman installed the materials into a building in Brownsville, Minnesota, which has a tax rate of 6.875%. As we went over earlier, the difference is due as a variable rate to Minnesota because the materials are incorporated in Brownsville. 6.875% minus 5.5% is 1.375%. I enter $45,564 on line 210 in the amount column and press enter. The system shows me I need to enter an amount for the tax due. I use my calculator to multiply $45,564 by .01375 (1.375%) to come up with the amount 626.505. Round to the nearest whole dollar to enter 627 in the tax due field.

Example 3

Sterling Cooper is a lawn mowing company located in the Twin Cities. The services provided are subject to the local tax based on where the services are performed.

Notes:


Using the Sales Tax Rate Map, the bookkeeper determines Glencoe ($1,718) is located in McLeod County with a tax rate in 2019 of 6.875%. Wyoming ($1,475) is located in Chisago County with a tax rate of 7.375%. Brooklyn Park ($1,880) is in Hennepin County with a rate of 7.525%, which includes two local taxes for Hennepin County. Mounds View ($5,033) is located in Ramsey County with a rate of 7.375%. Andover ($1,920) is located in Anoka County for a rate of 7.125%. St. Anthony ($3,365) is located in Hennepin County, again for a rate of 7.525%.

Gross Receipts for the year are $44,069 which includes non-taxable snow removal.

The bookkeeper adds the total taxable sales to come up with $15,391. This is entered into the General Rate Sales Tax line.

Next, she totals the Hennepin County amounts to come up with $5,245. This is entered on line 432, Hennepin County Transit Sales, along with line 430 Hennepin County Sales.

Line 435, Ramsey County needs an amount entered of $5,033 to account for the Mounds View totals.

Anoka County Transit Sales requires an amount of $1,920 to account for the Andover total sales.

Chisago County has a local tax that needs to be added to this return. Select the Add a Tax Line link and choose Chisago County Transit Sales from the drop-down menu. The total taxable amount to enter is $1,475 to account for the Wyoming sale.

Notes:

The totals entered on the return are summarized to total the Gross Receipts for all locations, Taxable Sales for all locations, and Taxable Purchases for all locations. If any edits are required, select the View/Edit – Return Information link to correct any errors, or select the previous button to return to the previous page.

The Tax amount shown includes the tax of all reported taxable sales and purchases.

If any payments are made prior to completing the return, the credits appear in the Deposits and Credits line.

When the return is filed late, projected penalty and projected interest calculates automatically. For more information on penalties and interest, use our website and enter the keyword Penalty in the search box.

The Projected Amount Due line calculates a total of the tax, penalty, and interest, less any credits.

Buttons

Previous During the filing process, to return to a previous page select the Previous button. Do not select back within the e-Services menu or use the back button on the browser to go back within the return. Selecting the back button on the browser will delete any unsaved progress when filing a return.

Cancel

The Cancel button will delete any progress and return to the last screen displayed before opening the return.

Save and Finish Later When filing a Sales and Use Tax Return, if you’re not ready to submit the return, select the Save and Finish Later button. When selecting this button, e-Services saves the information completed so far on the return. The return is not submitted to the Department of Revenue and you must finish completing the return and submit it within 14 days of selecting this button. After 14 days, the saved return expires and the process to file a return must be restarted.

Next The Next button advances to the next screen. If any errors are displayed, the error must be fixed to advance in the filing process.

Notes:


Payment

The projected amount due displays along with a statement, Would you like to make a payment now?

When no payment is submitted online with the return, a notice displays indicating no payment is being submitted with the return.

The Department of Revenue does not accept electronic payments from a bank located outside of the United States. An answer to the question is required that asks, Will funding be transmitted to or received outside of the United States?

To make a payment with this return, select Yes from the dropdown menu.

Enter all required fields for the bank account information. When making a payment and entering bank information, the option to save the bank information is available. This allows you to save the bank information to use again in the future.

To save the bank information for future use, select Yes.

When making a payment during the process to file a return, the projected amount due displays in the Payment Amount field. You must confirm this amount by entering the payment amount in the Confirm Payment Amount field.

Notes:

The Payment Date defaults to today’s date. If necessary, change the date to a date in the future by using the calendar icon in the Payment Date field.

The Return Summary, Projected Amount Due, and Payment Information displays.

To submit the return and payment, select Submit.

The confirmation page displays, which includes a confirmation number. The next time a payment is made for the Sales and Use Tax account, the saved banking information is available to use.

Payments generally take three (3) business days to process and to post to the account in e-Services.

The processing time to submit to the bank starts on the date selected. Postdated payments are submitted to the bank on the next business day after the date selected in e-Services.

Email Me

The Email Me button sends an email of the confirmation page to the e-Services email address listed within the user profile.

Notes:


Close The Close button returns the user to the Home Page.

Printer Friendly The Printer Friendly button prints the web page displayed with the confirmation number.

Print Return The Print Return button prints a copy of the return including each tax line. The print options will generate a popup screen. If additional assistance with popups is needed, see the Help page by selecting the Menu link.

Notes:

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