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Last Updated: 4/27/2017

Installation Into Real Property

Building materials, supplies, and equipment

Materials, supplies, and equipment used to construct, repair, or maintain real property are taxable. Examples include:

  • Farm buildings
  • Greenhouses
  • Residence

The following are considered real property when they are permanently attached to real estate:

  • Grain elevators
  • Silos
  • Storage bins

Note: When a contractor buys the materials and uses them to improve real property, the contractor must pay sales or use tax on the materials.

Farm machinery installed into real property

When a contractor installs items that qualify for the farm machinery exemption into real property, the contractor may purchase the items exempt from sales tax. Give your supplier a completed Form ST3, Certificate of Exemption. Specify the farm machinery exemption.

Examples include:

  • Barn cleaners
  • Feeding systems
  • Grain dryers
  • Irrigation equipment
  • Milking systems

Contractors may also buy repair and replacement parts for this equipment exempt from sales tax.

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