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2 Minnesota Revenue, Local Sales and Use Taxes Report local taxes when you electronically file your Minnesota sales and use tax. The figures are reported separately from state taxes. Who is required to collect local tax All retailers who are registered to collect Minnesota sales tax and are doing business in an area with a local tax must be register to collect that local tax. This in- cludes any sellers from outside the locality who:  have an office, distribution, sales, sample, or warehouse location, or other place of business in the local area either directly or by a subsidi- ary  have a representative, agent, salesperson, can- vasser, or solicitor in the local area, on either a permanent or temporary basis, who operates under the authority of the retailer or its subsid- iary for any purpose, such as repairing, selling, installing, or soliciting orders for the retailer’s goods or services, or leasing tangible personal property in the local area  ship or deliver tangible personal property in your own vehicle to the local area  perform taxable services in the local area Local tax applies to sales made or services performed within city limits or county boundaries only. ZIP Codes help to determine the taxing area, but don’t al- ways correspond exactly with city or county limits, so part of a ZIP Code may be outside the city or county. (See the “ZIP Codes” section on page 4.) Local use tax Local use tax applies when you buy items or services for use, storage, distribution, or consumption in the lo- cal area without paying local sales tax to the seller. Use tax is similar to sales tax and the rates are identical. It is based on your cost of taxable purchases. Common examples of when use tax is due:  You buy items outside the local area and the seller doesn’t charge local sales tax, and you use or store the item in the local area.  You buy a taxable item from an out-of-state seller who does not charge local sales tax. For more information, see Fact Sheets 146, Use Tax for Businesses, and 156, Use Tax for Individuals. Credit for local tax paid. If you pay local sales tax in Minnesota to one locality but use the items in another area that imposes local sales and use tax, you are al- lowed credit for the local sales tax already paid. Ways to register You may register for local taxes when filing your Sales and Use Tax return in e-Services. 1. Select the dropdown arrow next to the blank row on the return. 2. Select the local tax that you need to add. 3. Enter the dollar amount for this local tax. If you file by phone, you must register for local tax be- fore you file your return. Call 651-282-5225 or 1-800- 657-3605 (toll-free). You can email us at salesuse.tax@state.mn.us to regis- ter. If you send us an email, include your Minnesota Tax ID number. When to charge local tax As a general rule, charge local sales tax on all sales made in a local taxing area that are subject to Minne- sota state sales tax.  Charge local sales tax to customers from out- side the city or county who pick up items in the local area for business or personal use, even if the items are taken out of the local area.  Charge local sales tax to customers from out- side the local area if you perform taxable ser- vices in the local area. For example, charge lo- cal tax if you perform a car wash or deliver dry cleaned items in an area with a local tax. Exemptions Do not charge local sales tax on sales of taxable items when:  your customer gives you a completed Form ST3, Certificate of Exemption  you ship or deliver the items to your customer outside the local area  you sell direct-to-home satellite (DBS) ser- vices (not cable). These services are subject to state sales tax, but not local sales tax. This is a federal preemption from the Telecommunica- tions Act of 1996. Federal government agencies are exempt from state and local sales and use taxes. Minnesota state agencies have Direct Pay authoriza- tion when buying tangible items, which means that they do not pay sales tax to the seller—they pay use tax directly to the state. Local governments including cities, towns, counties, instrumentalities, political subdivisions, commissions, special districts, and governmental boards are not re- quired to pay general local sales taxes. No exemption certificate is necessary. Cities, counties, and towns do not pay the state sales tax on most purchases. For more information, see Fact Sheet 142, Sales to Governments.