General Guidance

The MinnesotaCare tax rate is 1.8% for payments received from the public (or separate fee for service charges paid by students other than tuition and fees) for health services provided (and certain drug receipts).

Exempt from the MinnesotaCare tax are payments received by an educational institution from student tuition, student activity fees, health care service fees, government appropriations, donations, or grants.

Some common health professions (not all inclusive) to be reviewed: dental assistant, dental hygienist, dentist, nurse, nursing assistant, paramedic, physician assistant, psychologist, speech language pathologist.

• Example 1. A dental hygienist student in training cleans the teeth of an individual and charges $30 which is revenue to the college/university. The college/university should remit the 1.8% MinnesotaCare tax as indicated below.
• Example 2. The college/university provides shots, physicals or other health services to students for which the student is charged a fee for the service. The college/university should remit the 1.8% MinnesotaCare tax if the college/university is providing the service and collecting the fee for service revenue.

In general for massage therapy, colleges and universities should collect Minnesota sales tax and not MinnesotaCare tax. However, if the massage therapy is considered to be for treatment of an illness, injury, or disease either the MinnesotaCare tax or no tax (not sales tax) would be collected depending upon the facts of the situation. Please see Minnesota Revenue Notice #07-06 and contact Tax Services for further details.

If you have questions or comments please e-mail Tax Services or refer to the staff directory link at the top of this page for additional contact information.