Sales Tax on Bullion in Minnesota: The 99.9 Percent Rule and What It Really Covers

What Minnesota actually exempts under Section 297A.67 subdivision 34

Minnesota is one of the stricter states in the country for physical precious-metals buyers. The statute doing the work is Minnesota Statutes Section 297A.67 subdivision 34, enacted in 2017 as part of the General Sales and Use Tax chapter. Three sentences do all the work.

• What qualifies: “bars or rounds that consist of 99.9 percent or more by weight of either gold, silver, platinum, or palladium and are marked with weight, purity, and content.”
• What is excluded by name: jewelry, works of art, and scrap metal.
• Legislative intent: to put precious-metals bullion on the same tax footing as stocks, bullion ETFs, bonds and other investment instruments.

Two features of that definition make Minnesota a tighter rulebook than most of its Midwest neighbors. The purity floor is 99.9 percent, not the 90 percent floor used in Michigan and several Mountain West states. And the exempt form is specifically “bars or rounds,” so coins are not called out as an exempt category even when they meet the purity test. Palladium is enumerated, which is a bright spot: Minnesota is one of the few states that explicitly covers palladium.

What still gets taxed: coins below 99.9 percent, jewelry and most borderline cases

Everything else a precious-metals shop might ring up is standard taxable retail at the combined Minnesota rate:

Three lines in that table are the hinge points. The 99.9 percent floor knocks out the two most common sovereign gold coins (American Gold Eagle and Krugerrand) because their alloys drop total purity to 91.67 percent even though the pure-gold content is a full ounce. Pre-1965 US “junk silver” at 90 percent purity fails the same test. And the statute literally says “bars or rounds,” so dealers who read the law strictly can treat even high-purity government coins (Gold Buffalos, Silver Eagles, Maple Leafs) as taxable. Dealers who read it on function, not form, treat high-purity coins as exempt. There is no formal Minnesota Department of Revenue bulletin resolving the point in public guidance at the time of writing, so expect variation between shops and ask up front.

How Minnesota sales tax rates actually stack

Minnesota does not run the flat-rate model that Michigan or Massachusetts use. The state rate is one thing; local jurisdictions can and do add their own. The Minnesota Department of Revenue Sales and Use Tax guidance lays out the layers:

• State base rate: 6.5 percent under Minnesota Statutes Section 297A.62 subdivision 1.
• Constitutional dedication: 0.375 percent added by Minnesota Constitution Article XI Section 15, in effect through June 30, 2034.
• Combined state rate: 6.875 percent for general retail sales.
• Local add-ons: variable. Counties, cities, special taxing districts and transit improvement areas can impose local sales taxes on top. Combined rates in parts of the Twin Cities metro and in cities with their own local option taxes run higher than the flat 6.875 percent.

On a mixed cart the math is applied line by line. An exempt 1 oz silver round and a taxable copper round trigger two paths at checkout: zero on the round, the full combined Minnesota rate on the copper piece. Dealers who handle both need a point-of-sale configuration that separates qualifying bullion SKUs from accessory and jewelry SKUs so the invoice itemizes correctly. Confirm the exact combined rate at the delivery address with the Minnesota Department of Revenue sales tax rate calculator before placing a large order.

Online, in-store and out-of-state: who collects, who self-reports

Since the US Supreme Court decision in South Dakota v. Wayfair (2018), out-of-state online retailers with enough Minnesota sales must register and collect Minnesota sales and use tax on shipments to Minnesota addresses. That did not change the substance of Section 297A.67 subdivision 34, but it changed who writes the check.

• Qualifying bar or round at 99.9 percent shipped from any state to Minnesota: not taxable. Well-run national dealers configure their carts to zero out the tax line on these SKUs for Minnesota orders.
• Non-qualifying item shipped to Minnesota (jewelry, pre-1965 silver, 10-karat items, numismatic accessories, lower-purity bullion coins depending on dealer reading): the seller usually collects the combined Minnesota rate at checkout, or the buyer self-reports the matching use tax on their Minnesota income tax return.
• In-person purchase at a Minnesota coin shop: same substantive rules, local combined rate applies at the shop’s location.
• Taxable item bought in person in Wisconsin, Iowa, North Dakota or South Dakota and brought home: the Minnesota resident technically owes the matching Minnesota use tax, with a credit for sales tax properly collected at the origin.

If you see a line item labeled “sales tax” on a 99.9 percent silver bar shipped to a Minnesota address, ask the dealer to correct the invoice and cite Section 297A.67 subdivision 34. Recovery from the Minnesota Department of Revenue on a wrongly collected third-party sales tax is a slow, paperwork-heavy path.

Minnesota buyers in the regional context

Minneapolis, Saint Paul, Rochester and Duluth host long-running coin shops and precious-metals offices. Our Minnesota coin dealer directory lists verified shops by city with hours, services and reader reviews, and the Minnesota gold dealer directory covers broader bullion operations. For current spot pricing before a purchase, use our internal gold value calculator and the gold price page instead of a third-party chart.

Practical scenarios: what a Minnesota buyer actually pays

Two worked examples, using the 6.875 percent combined state rate on taxable items (local add-ons would push the taxable number higher at some delivery addresses):

1. Minneapolis coin shop, 10,000 dollar order of 1 oz 99.9 percent silver rounds. Sales tax owed on the state portion: 0 dollars. The rounds qualify as bars or rounds at 99.9 percent purity, exempt under Section 297A.67 subdivision 34.
2. Same shop, 2,000 dollar order of 14-karat gold jewelry. State portion: 137.50 dollars (6.875 percent). Local add-on if applicable on top. The jewelry exclusion in the statute is explicit.

A third scenario shows the online path. An out-of-state dealer ships 5,000 dollars in American Gold Eagles (91.67 percent) plus 5,000 dollars in 99.9 percent silver bars to a Saint Paul address. Silver bars: 0 dollars at the state rate. American Gold Eagles: 343.75 dollars at the 6.875 percent state rate on the 5,000 dollar portion, plus any applicable local Minnesota tax. Mixed invoices should break out the tax line by SKU category, not blended across the whole order. For a buyer building a stack of 99.9 percent silver rounds, high-purity gold bars, or platinum and palladium bullion, Minnesota is effectively tax-free at the state level. For a buyer picking up classic American Gold Eagles, Krugerrands, pre-1965 silver or jewelry, the full Minnesota rate kicks in.

Record-keeping and audit exposure

Keep the invoice for every precious-metals purchase, whether tax was collected or not. For exempt items the invoice should show either a zero tax line or a clear notation of the Section 297A.67 subdivision 34 exemption with the item’s purity and marking. A dealer who refuses to itemize or lumps taxable and exempt items into a single subtotal is a red flag on both sales-tax compliance and shop transparency. For dealers, the Minnesota Department of Revenue can audit sales and use tax returns and expects documentation showing which line items were exempt, their purity, their form (bar or round) and the required weight-purity-content marking.

How Minnesota compares to its neighbors

Minnesota is one of the stricter bullion exemption states in the Upper Midwest. Specifics vary across state lines:

• Iowa: exempts coins and bullion more broadly than Minnesota, with no 99.9 percent purity floor on common bullion products.
• Wisconsin: taxes most precious-metals sales as standard retail, with limited exemptions.
• North Dakota and South Dakota: exempt coins and bullion under different statutory frameworks that are broader than Minnesota’s narrow bar-or-round rule.
• Federal treatment: entirely separate. Physical gold and silver held more than one year are federally taxed as collectibles at up to 28 percent on realized long-term capital gains under IRC Section 1(h)(4). Our capital gains guide walks through the mechanics.

For pure 99.9 percent bars and rounds, Minnesota is already tax-free at the state level. For jewelry, pre-1965 silver, American Gold Eagles or Krugerrands, buyers can compare the Minnesota combined rate against the destination rate and the cost of travel. See the full picture on our state sales tax on bullion map.

Where to verify before you buy

Rules change. Before a large purchase, confirm the current text and rate directly with the state:

• Minnesota Statutes Section 297A.67 subdivision 34, the operating statute for the precious metal bullion exemption.
• Minnesota Statutes Section 297A.62, the general state sales and use tax rate.
• Minnesota Department of Revenue Sales and Use Tax, with the current combined state rate and local add-on guidance.
• Minnesota Department of Revenue sales tax rate calculator, for the exact combined rate at a specific delivery address.
• IRS Topic 409: Capital Gains and Losses, for the separate federal collectibles rate applicable when bullion is later sold at a gain.

This guide is educational, reflects our reading of the public Minnesota Department of Revenue guidance and the text of Section 297A.67 subdivision 34 current at publication, and is not legal or tax advice. For a substantial purchase, an audit issue, or a dealer starting a Minnesota storefront, a licensed Minnesota CPA or sales-tax attorney is the right call.