Sales Tax Fact Sheet - Sales To Governments - Minnesota Department Of Revenue


Sales to Governments
Sales Tax
Fact Sheet
Integrated Cards: Two or more business lines (card
What’s New in 2013
types) whose processes are integrated into one card.
Starting July 1, 2013, charges for monitoring and
Credit cards used by the federal government are taxed as
described below. The four-digit prefix identifies the card for
electronic surveillance of people placed on in-home
“federal” use.
detention by a court order or the Minnesota Correc-
Travel Cards - VISA, prefix 4486 or 4614; and MasterCard,
tions Department are not taxable when provided at
prefix 5568 or 5565 are usually used for lodging, prepared
the direction of a county.
food, drinks, and car rentals. The sixth digit of these cards
determines whether or not to charge sales tax.
If the sixth digit is 1, 2, 3, or 4, purchases using these
Federal government
cards are billed directly to the federal employee, who is re-
imbursed by the federal government. Purchases made using
these cards are taxable.
Sales to the federal government and its agencies are not
taxable. The federal agency must give the seller a pur-
If the sixth digit is 0, 6, 7, 8, or 9, purchases using these
chase order, payment voucher, work order, or fully com-
cards are billed directly to and paid for directly by the federal
pleted Form ST3, Certificate of Exemption, to purchase
government. Purchases made using these cards are not
exempt from tax. Purchases made by an employee who is
reimbursed by the federal government are taxable.
Fleet Cards - VISA, prefix 4486, 4614, 4716; MasterCard,
prefix 5565, 5568; Voyager, prefix 8699; and Wright Ex-
Prepared food, drinks and lodging billed directly to
press, prefix 5565 are usually used for fuel and maintenance
and paid for by the federal government and its agencies
of vehicles, planes, boats, and equipment. Purchases using
are not taxable. However, prepared food, drinks and
these cards are billed directly to and paid for directly by the
lodging billed to an employee are taxable even if reim-
federal government. Therefore, these purchases are not
bursed by the federal government.
Purchase Cards - VISA, prefix 4486, 4614 or 4716; Mas-
Federal credit cards
terCard, prefix 5565, or 5568 are usually used for expenses
Federal employees sometimes make purchases using credit
such as computers, furniture, office supplies, services, etc.
cards. There are four different types of cards issued by the
Purchases made with these cards are billed directly to and
federal government to employees.
paid for directly by the federal government. Purchases made
Travel Cards: For travel expenses related to official
with these cards are not taxable.
government travel (airline, hotel, meals, incidentals);
Integrated Cards – One card is used for all types of pur-
Fleet Cards: For fuel and supplies for government vehi-
chases. The prefixes and the guidelines are the same as
cles; and
listed above.
Purchase Cards: For purchasing general supplies and
services; and
State government
Minnesota state agencies use a direct pay authoriza-
Exceptions: Most taxable services cannot be purchased
tion. Sellers should not charge them sales tax, because
exempt with a direct pay authorization. If you sell any of
the state pays the tax directly to the Department of Reve-
the following to Minnesota state agencies you must
nue. Purchase orders issued by Minnesota state agencies
charge state general sales tax and local sales tax, if appli-
include information about their direct pay authorization,
so it is not necessary for sellers to receive a Form ST3,
prepared food or drinks
Certificate of Exemption.
lodging and related lodging services
admissions to places of amusement and athletic events,
and use of amusement devices
motor vehicles (purchases only)
Sales and Use Tax Division – Mail Station 6330 – St. Paul, MN 55146-6330
This fact sheet is intended to help you become more familiar with Minnesota tax
Phone: 651-296-6181 or 1-800-657-3777
laws and your rights and responsibilities under the laws. Nothing in this fact sheet
Minnesota Relay (TTY) 711
supersedes, alters, or otherwise changes any provisions of the tax law, administrative
rules, court decisions, or revenue notices. Alternative formats available upon request.
Stock No. 2800142, Revised 6/13
Minnesota Revenue, Sales to Governments


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