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Last Updated: 7/13/2017

Machinery and Equipment

Qualifying new and used farm machinery is exempt from sales tax. To be exempt, the machinery must do all of the following:

  • Meet the definition of farm machinery outlined in Minnesota Statutes 297A.61, subd. 12
  • Be used directly in agricultural production
  • Be used 50 percent or more of its operating time in agriculture production

You must give your supplier a completed Form ST3, Certificate of Exemption. Specify the Farm Machinery Exemption.

What is ‘farm machinery’?

Farm machinery includes, but is not limited to:

  • Machinery for the preparation, seeding, or cultivation of soil for growing agricultural crops.
  • Barn cleaners, milking systems, grain dryers, feeding systems including stationary feed bunks, and similar installations, whether or not the equipment is installed by the seller and becomes part of the real property.
  • Irrigation equipment sold for exclusively agricultural use, including pumps, pipe fittings, valves, sprinklers, and other equipment necessary to the operation of an irrigation system when sold as part of an irrigation system, whether or not the equipment is installed by the seller and becomes part of the real property.

For a list of farm machinery that qualifies for this exemption, see Exempt Farm Machinery.

Repair and replacement parts

Repair and replacement parts for farm machinery are exempt from tax, except for tires (which are taxable). The exemption applies to repair or replacement parts installed in place of a part that has a specific or generic part number assigned by the farm machinery manufacturer.

Accessory tools and equipment

Accessory tools, equipment, and other short-lived items are exempt if they meet all of following requirements:

  • Are separate, detachable units
  • Produce a direct effect on the agricultural product
  • Have a useful life of less than 12 months when continuously used in production under normal conditions

Examples include:

  • Milk filter discs
  • Mower sickle sections

Generators

Primary and backup generators are exempt if they are used to generate electricity to:

  • Operate farm machinery
  • Provide light or space heating that is essential to the production of livestock, dairy animals and products, or poultry and poultry products.

However, generators used for general heating or lighting are taxable.

Manure handling systems

Machinery or equipment that is part of a manure handling system is exempt, including:

  • Agitators
  • Hoses
  • Pumps
  • Spreaders
  • Valves

The following items are taxable:

  • Concrete pits
  • Slotted flooring
  • Other items that are part of the livestock building structure

Grain dryer systems

Grain drying equipment used in agricultural production is exempt, including:

  • Dryers
  • Drying system components
  • Similar types of equipment

The following items are taxable:

  • Grain bins
  • Grain hoppers
  • Equipment used for storage of grain
  • Silos

Aircraft

Sales and use tax do not apply to aircraft used directly and principally for agricultural spraying. However, you must register the aircraft with the Minnesota Department of Transportation and pay the registration tax.

Custom farm work

Machinery purchased by an individual or a business to perform part of the agricultural production process is exempt from sales tax. Examples include:

  • Custom combining
  • Harvesting
  • Planting
  • Spraying

Aquaculture production equipment and parts

Qualifying equipment used in aquaculture production is exempt from sales tax. Examples include:

  • Automatic feed systems
  • Fish counting devices
  • Net pens
  • Oxygen generators
  • Water diversion devices

Note: To qualify for the exemption the licensed aquatic farm must own the aquatic life.

< Materials Consumed in Agricultural Production   Livestock Confinement Systems >
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