MINNESOTA – Be aware: Fees that vendors charge you for credit card transactions are also subject to sales tax, according to a decision from the Minnesota Tax Court.
A business entity that offered vacation and travel rentals said the card processing fees should be tax exempt because the surcharge was listed separately from the cost of the reservation.
However, the court said, even if the credit card surcharge was listed on its own, it was still included in the actual “sales price” for the transaction. That is, the transaction couldn’t be completed without the customer paying the surcharge, and there was no way it could be excluded from a credit card purchase. So sales tax was owed on the fee.