Minnesota – Sales in Duty Free Stores

SALT Report 2976 – The Minnesota Department of Revenue issued a notice that explains the Department’s position regarding the imposition of sales tax to sales made in duty-free stores.  Generally, sales of tangible personal property by a duty-free store that will be received by the purchaser at the store are taxable unless the sale qualifies for an exemption under Minnesota’s sales and use tax laws. This includes sales of tangible personal property to international passengers.

However, the following sales by a duty free store are considered to be outside of Minnesota and are exempt from sales tax:

  • A sale of tangible personal property made by a duty-free store that will be delivered to the jetway and distributed to the purchaser who is a passenger on an international flight
  • A sale made by a duty-free store of tangible personal property that is delivered to a purchaser who is leaving the United States at a port of entry other than an airport.  The item must be delivered to the purchaser at the point of, or after the point of, exit from the United States

It is important to note that, travelers who receive tangible personal property and leave the United States, and later return to Minnesota with the tangible personal property, may owe use tax to the Department.

For Further Information

Minnesota Department of Revenue – Revenue Notice No. 13-03