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Minnesota - Sales and Use Tax Exemptions and Exemption Certificates
Minnesota sales tax is imposed on the gross receipts from sales at retail, lease and rental of tangible personal property and on the furnishing of specified services.

MINNESOTA EXEMPTIONS:

Minnesota General Exemptions: Food and food ingredients; tangible personal property purchased with food stamps; prepared food, candy, and soft drinks served to patients, inmates, or persons residing at hospitals, sanitariums, nursing homes, senior citizen homes, and correctional, detention, and detoxification facilities; prepared food, candy, and soft drinks served at public and private elementary, middle, or secondary schools; drugs and medical devices for human use; clothing; baby products; caskets and burial vaults for human burial; textbooks and instructional materials; residential heating fuels; water services for residential use; occasional sales; solar energy systems; cigarettes and motor vehicles taxed under other taxes. (Minn. Stats. §297A.67)

Minnesota Business Exemptions: Certain materials stored, used, or consumed in industrial production of personal property intended to be sold ultimately at retail are exempt, whether or not the item so used becomes an ingredient or constituent part of the property produced; materials stored, used, or consumed in providing a taxable service intended to be sold ultimately at retail; mill liners, grinding rods, and grinding balls that are substantially consumed in the production of taconite; capital equipment; special tooling; air cooling equipment; pollution control equipment; tangible personal property that is used or consumed in producing any publication regularly issued at average intervals not exceeding three months; wind energy conversion systems; automatic fire-safety sprinkler; telecommunications, cable television, or direct satellite machinery and equipment purchased or leased for use directly by a telecommunications, cable television, or direct satellite service provider primarily in the provision of telecommunications, cable television, or direct satellite services that are ultimately to be sold at retail; medical supplies purchased by a licensed health care facility or licensed health care professional to provide medical treatment; purchases of tangible personal property or taxable services by a qualified business are exempt if the property or services are primarily used or consumed in a job opportunity building zone or Biotechnology and health sciences industry zone or international economic development zones. (Minn. Stats. §297A.68)

Minnesota Agricultural Exemptions: Materials stored, used, or consumed in agricultural production of personal property intended to be sold ultimately at retail; farm machinery, logging equipment and fencing used for the containment of farmed cervidae; repair and replacement parts, except tires, used for maintenance or repair of farm machinery, logging equipment, and aquaculture production equipment. (Minn. Stats. §297A.69)

Minnesota Exemption for Government and Nonprofit Groups: The United States and its agencies and instrumentalities; school districts, University of Minnesota, state universities, community colleges, technical colleges, state academies; hospitals and nursing homes owned and operated by political subdivisions; the Metropolitan Council; public libraries, public library systems, multicounty, county law libraries, state agency libraries, the state library, and the Legislative Reference Library.(Minn. Stats. §297A.70, Regulation 8130.5700, 8130.6200)

Minnesota Construction Exemptions: Building materials, equipment, and supplies and other items used in certain construction projects are exempt regardless of whether purchased by the owner or a contractor, subcontractor, or builder. (Minn. Stats. §297A.71)

CAUTION: Sales tax exemptions mentioned above are very briefly described. Please see the exemption statute and the applicable regulations for details. Transactions that do not meet the requirements of the exemption statute and its applicable regulations do not qualify for the sales tax exemptions.

MINNESOTA EXEMPTION CERTIFICATES: All sales are presumed to be taxable and that the burden is on the retailer to prove that the item is being purchased for resale or is otherwise exempt from tax. The burden of proving that a sale is not a taxable retail sale is on the seller. However, a seller is relieved of liability if the seller obtains a fully completed exemption certificate within 90 days after the date of the sale. If the certificates is not obtained within the 120-day period, the sales will be deemed taxable sales. (Modified Revenue Notice # 98-11)

A taxpayer must submit an application to the commissioner in order to obtain an exemption authorization to be used on the certificate of exemption for the following exemptions:

  1. Waste processing equipment used at a resource recovery facility*
  2. Direct payment of sales or use tax*
  3. Direct payment of tax by interstate for hire motor carriers and
  4. Purchases of tangible personal property or services by a charitable organization (Regulation 8130.3100)

*(1)&(2) Contact the Department of Revenue for information on the requirements and how to apply.

A taxpayer does not need to submit an application in order to obtain an exemption authorization when the certificate of exemption is used for other exemptions. An exemption certificate must be substantially in the form prescribed by the commissioner. The exemption certificate must bear the name and address of the purchaser; the identification number issued to the purchaser like the purchaser's Minnesota tax identification number or the purchaser's federal Employer Identification Number; or a valid state-issued identification number, and the name of the state of issue. (Minn. Stats. §§ 297A.72, 297A.665)

 
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