Reporting Individual Use Tax

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If you live in Rochester and buy a taxable item for your own use without paying sales tax, you then probably owe a 6.5% State sales tax and a .5% local Rochester sales tax. The tax rate is the same for both sales and use tax, and the same exemptions apply.

Here are some cases when use tax is due:

You buy taxable items by mail order, from a shopping channel, over the Internet, etc., and the seller doesn’t collect Minnesota tax from you.
You buy something exempt intending to resell it in your business, but instead take it out of inventory for business or personal use.
A seller in another state or country does not collect any sales tax from you on a sale of an item that is taxed by Minnesota’s law.
A Minnesota seller fails to collect state or Rochester sales tax from you on a taxable item.
An out-of-state seller properly collects another state’s sales tax at a rate lower than Minnesota’s. In this case, you owe the difference between the two rates, plus Rochester's local sales tax.

Individuals and businesses should keep track of purchases subject to use tax. Businesses should report use tax due when reporting your sales tax each month. Also, keep a record of the purchases on which you paid use tax, noting the date reported and paid (refer to the fact sheets below).

Individuals as well as businesses owe use tax on taxable purchases when they have not paid sales tax. An individual, however, can purchase up to $770 in taxable items for personal use without owing use tax. If the individual buys more than $770 in a calendar year, that person owes use tax on all taxable items purchased that year. This exemption does not apply to purchases from a seller who is required to collect Minnesota sales or use tax and does not.

Use Form UT-1 to report your individual use tax.

If there are any questions about sales and use tax, call the Minnesota Department of Revenue - Rochester office at 507-285-7414.