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Minnesota sales tax notices

Got a letter from the Minnesota Department of Revenue? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Minnesota Department of Revenue (opens in a new tab)

Disagree with a notice?

If you disagree with a tax or penalty the Department assessed, you can file a written administrative appeal with the Department or appeal directly to the Minnesota Tax Court. Appeals must be in writing and include your identifying details, the tax type and periods, what you dispute, and why. You can ask for an informal meeting in your appeal. If the Department denies your appeal, you can then go to the Tax Court.

Deadline: 60 days from the Notice Date on the order. You can request a 30-day extension in writing.

Source: Minnesota Department of Revenue (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance due

Bill or due process letter (notice before enforced collection)

A bill or letter showing what you owe (tax, penalty, interest, and other charges), why you owe it, how long you have to pay, and what collection actions may follow. By law, the Department must send this notice before any enforced collection action.

Why you got it

  • A balance on a business tax account is unpaid
  • An assessment was not paid by its due date

What to do

  1. Check the bill: it shows what you owe (tax, penalty, interest and other charges) and why
  2. Pay the tax by the due date in e-Services, or contact the Department by phone, email or letter to request a payment agreement
  3. If the bill includes a penalty you had reasonable cause for, send an abatement request through e-Services (Collection Question) or to mdor.collection@state.mn.us within 60 days of the first penalty notice
  4. If an Exemption Claim Form is enclosed and you qualify, submit it to prevent certain collection actions

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Due Process | Minnesota Department of Revenue (opens in a new tab)

Penalty & interest

Charges added for filing or paying late, or for underreporting.

Penalty & interest

Notice of penalty (letter or bill assessing a penalty)

A letter or bill that adds a penalty for not following state tax law, such as filing or paying late. Businesses can ask for the penalty (and interest on it) to be abated.

Why you got it

  • A late return or late payment
  • Paying by a non-electronic method when you are required to pay electronically

What to do

  1. Check the penalty against your records, such as filing and payment dates and whether you were required to pay electronically
  2. If you had reasonable cause (such as circumstances beyond your control or a first-time occurrence) or relied on incorrect written advice from the Department, send a written abatement request with your business name, Minnesota Tax ID or FEIN, tax types and periods, the reason, and supporting documents
  3. For a penalty letter, send it through e-Services, email the tax division, or mail it to the address on the appeal enclosure. For a bill, use e-Services (Collection Question) or mdor.collection@state.mn.us. You do not need to pay the tax or interest first
  4. If the request is denied, follow the appeal instructions in the denial letter

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Written abatement request within 60 days of the date on the first notice of the penalty

Source: Penalty Abatement for Businesses | Minnesota Department of Revenue (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Notice of Change in Sales and Use Tax (tax order)

A tax order assessing additional sales and use tax, usually after an audit. It comes with a payment voucher.

Why you got it

  • A sales and use tax audit found tax due

What to do

  1. Review the order and audit findings against your records
  2. If you disagree, file a written appeal within 60 days of the Notice Date. You can request a 30-day extension in writing
  3. If penalties were assessed and you had reasonable cause, send a written abatement request within 60 days of the first penalty notice. You don't have to pay the tax or interest first if the request is on time
  4. Pay the tax you agree with within 60 days to avoid added penalties and interest, in e-Services (Make a Payment, then Audit Payment) or by check with the voucher

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Pay the full amount within 60 days or additional penalties and interest may apply

Source: Sales and Use Tax Payments | Minnesota Department of Revenue (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Audit notification ("Minnesota Revenue is auditing (reviewing) my tax return")

Contact from an assigned auditor saying your returns are being reviewed. The auditor tells you what information they need.

Why you got it

  • Your returns were selected for review
  • The Department is reviewing your returns using information from you and others

What to do

  1. Give the auditor the records they ask for
  2. If you want a representative, sign Form REV184b (Business Power of Attorney) and send it to the auditor
  3. If you need a representative during a meeting, you can ask to stop. The Department will give you up to 30 days to contact one
  4. Review the written findings you receive at the end of the audit

Source: Minnesota Revenue is auditing (reviewing) my tax return. Now what? (opens in a new tab)

Registration

Changes to your permit or account: required registration, filing-frequency changes, revocation, or closure.

Registration

Sales tax permit revocation

The Department can cancel or revoke your sales tax permit if you do not comply with sales and use tax laws. With a revoked permit, you cannot make retail sales or provide taxable services.

Why you got it

  • Not filing or paying sales and use tax
  • Defaulting on a payment agreement

What to do

  1. Stop making retail sales. Selling with a revoked permit can lead to a felony charge and a $100-per-day civil fine
  2. Get current on all sales tax filing and payments
  3. Pay the security deposit the Department requires to reinstate the permit
  4. Contact the Collection Division at 651-556-3003 or 800-657-3909

Source: Sales Tax Permit Revocations | Minnesota Department of Revenue (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Levy or lien (enforced collection action)

When a debt stays unpaid after the due process notice, the Department can take money or property through a levy (bank, wage, third-party, or seizure) or file a public lien on your property.

Why you got it

  • Not contacting the Department by the due date on a bill or demand letter
  • A debt left unpaid after due process notice

What to do

  1. Contact the Collection Division at 651-556-3003 or 800-657-3909, or email mdor.collection@state.mn.us, about your balance
  2. Pay in full, or ask about a payment agreement. Collection actions such as a lien can continue while a payment agreement is in place
  3. If the Department takes jeopardy collection action, you have 30 days to request an administrative review

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Collection Actions | Minnesota Department of Revenue (opens in a new tab)

Ask for penalty relief

Penalties on a Minnesota notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Penalty abatement

  1. Send a written request within 60 days of the date on the first penalty notice. You do not need to pay the tax or interest first if the request is on time
  2. Include your name and contact details, business name, FEIN or Minnesota Tax ID, the tax types and periods, the reason, and supporting documents
  3. Send it through e-Services, or by email or mail to the place shown for your type of notice (penalty letter or bill)
  4. If it is denied, follow the appeal instructions in the denial letter

What qualifies: Reasonable cause, such as circumstances beyond your control or a first-time occurrence, or incorrect written advice from a Department employee

Interest: Interest on an abated penalty can be abated too; the Department does not abate tax and rarely abates interest on tax

Source: Penalty Abatement for Businesses | Minnesota Department of Revenue (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Minnesota sales tax guide.

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