Sign In
Last Updated: 4/27/2017

Sales

​Most sales by agricultural producers are not taxable. However, if you sell taxable items you must charge sales tax unless an exemption applies. If the item qualifies for an exemption, the purchaser must give you a completed Form ST3, Certificate of Exemption.

Taxable sales include:

  • Animals sold as farm working stock, including mules, oxen, and herd dogs

  • Animals sold as pets or to breed pets

  • Hay bales to a contractor for erosion control

  • Manure for purchasers to use on their lawns or gardens (flower, vegetable)

  • Plants and seeds sold to purchasers for home vegetable gardens, lawns, or flower beds

  • Plants, trees, and sod sold to person installing into real property

Nontaxable sales include:

  • Feed for agricultural animals, including pets raised for sale, farm working stock, and breeding stock

  • Grain sold as feed to other agricultural producers

  • Produce, such as eggs, honey, fruits, and vegetables 

Equipment sales

If you sell items that do not qualify for the farm machinery exemption, the sale is taxable. Examples include:

  • Fencing
  • Grain bins
  • Hand tools
  • Snow blowers

For more information, see the Machinery and Equipment section.

Farm auctions

Farm auctions are exempt from tax. A farm auction is a public auction conducted by a licensed auctioneer. Substantially all the property sold at a farm auction consists of property used in the trade or business of farming and nonbusiness property such as household goods.

For more information, see Fact Sheet 132, Isolated and Occasional Sales.

Rentals and leases

If you rent or lease farm machinery, the payments are not taxable. The purchaser or lessee must give you a completed Form ST3, Certificate of Exemption.

Note: The rental or lease payments are taxable if the machine or implement:

  • Does not meet the definition of farm machinery in state law
  • Is rented to a contractor or others for nonagricultural use

For more information, see the Machinery and Equipment section.

Charging sales tax

When you sell a taxable item, you must charge the state general sales tax and any local sales taxes that apply. Calculate tax based on the taxable sales price of the item (including any delivery charges).

Local sales tax

Some cities and counties have local sales and use taxes. You must charge any local taxes that apply if your business is located in, or delivers to, an area that has them.

To determine the sales tax rate, use the location where the product is received by the customer – typically your business or a delivery address. You can use the Sales Tax Rate Calculator to help you determine the sales tax rate.

Note: The rate calculator does not include special local taxes. 

For more information, see:

Local Tax Information

Fact Sheet 164S, Special Local Taxes

Fact Sheet 164M, Minneapolis Special Local Taxes

< Defining Agricultural Production   Animals >
Return​​​​ to contents page for this guide