If a municipal fire department sells surplus equipment or other tangible items on a regular basis, the sales are taxable.

For more information, see Isolated and Occasional Sales.

Fire departments that do not qualify as a local government must pay sales or use tax on certain purchases.

Volunteer fire departments are independent nonprofit organizations. These departments are exempt from sales and use tax if they are both:

• Exempt from federal income tax under Internal Revenue Code, section 501(c)(3).
• Granted Minnesota Nonprofit Exempt Status – Sales Tax. See Nonprofit Organizations.

Fire departments operated by local governments are not volunteer fire departments even if staffed by volunteers. A fire department is considered separate from the local government if it has its own constitution or articles of incorporation.

Municipal fire departments are operated by local governments. See Government - Local Governments.

Volunteer and municipal fire departments may purchase most items used to prevent fire or protect property from fire exempt from sales tax.

To claim the exemption, give the seller a completed Form ST3, Certificate of Exemption. See the table below for specific examples.

Note: You initially equip a vehicle around the same time the vehicle is purchased. This exemption no longer applies when the vehicle is equipped and begins to operate as a fire or rescue vehicle.

Items that are not used to prevent fires or protect property from fire are taxable. For example, a washing machine used to wash protective clothing is taxable.

Water – used directly in providing fire pro­tection by an organized fire department, fire protection district, or fire company regularly charged with the responsibility of providing fire protection to the state or a political subdivision – is exempt from sales tax.

Water used by fire departments to fight fires or protect property is not taxable.

Water used to flush hydrants, wash fire trucks, or clean the fire station is taxable.

For more information, see Revenue Notice 12-09, Government Exemptions – Water Used Directly in Providing Fire Protection.

Uniforms are clothing, even if chemically treated or made from fire retardant fabric. Clothing is exempt from sales tax regardless of who buys it.

Unmarked police cars and other unmarked patrol cars are taxable.

• Ammunition
• Badges
• Barrier tape
• DARE supplies
• Fingerprint kits/supplies
• Flares
• Guns
• Handcuffs
• Holsters
• Police dogs
• Scanners
• Traffic counters

Marked police patrol vehicles are not taxable because they are not required to be registered. If the owner of the vehicle chooses to register the marked vehicle with the Department of Public Safety, no tax is due.

Accessory items used to initially equip these vehicles are not taxable. Examples include:

• Gun racks
• Light bars
• Radar units
• Radios

Note: You initially equip a vehicle around the same time the vehicle is purchased. This exemption no longer applies when the vehicle is equipped and begins to operate as a rescue vehicle.

Bullet-resistant body armor that provides ballistic and trauma protection is not taxable when purchased by licensed peace officers and state and local law enforcement agencies.

Fuel purchased by a state or local government for use in marked police vehicles is exempt.

The following are not considered emergency rescue vehicles, even if used for emergency, fire, or police work:

• Aircraft
• Snowmobiles
• Watercraft
• Vehicles licensed only for off-road use

Purchases or leases of these vehicles are taxable. Tax also applies to repair and replacement parts.

Fire chief and marked patrol vehicles are not taxable when purchased or leased. Tax does apply to repair and replacement parts.

Emergency vehicles owned by private entities, such as airports and mining companies, are taxable, except for ambulances licensed under section 144E.10.

Fuel is exempt when purchased by a state or local government for use in a vehicle that is exempt. For example, fuel for a fire chief car or a marked patrol car is exempt.

Most purchases by local governments or nonprofit organizations are exempt from sales tax. However, certain purchases are taxable:

• Items not used to perform the exempt functions of a nonprofit organization
• Prepared food, candy, soft drinks, alcoholic beverages, and catered food
• Lodging
• Construction materials for buildings or facilities which are not principally used by the local government or nonprofit organization
• Construction materials and supplies by a contractor or subcontractor under a lump-sum contract
• Purchases subject to other taxes, such as solid waste management tax or petroleum tax

Purchases made by an employee, even if reimbursed, are taxable. Exempt organizations must directly purchase goods and services for their exemption to apply.

Although cities, counties, and townships are exempt from general sales and use taxes, they must pay other types of special local taxes, such as restaurant, liquor, or lodging taxes.

For more information, see Governments – Local Governments.

• 144E.10, Ambulance Service Licensing
• 168.012, Vehicles exempt from tax or license fees
  • subd. 1, Vehicles exempt from tax, fees, or plate display
  • subd. 6, Fire truck or ambulance operated without profit
• 272.021, Property of volunteer fire department exempt from taxation
• 297A.67, General Exemptions
  • subd. 28, Ambulance supplies, parts, and equipment
  • subd. 30, Motor vehicles
• 297A.68, subd. 19, Petroleum products
• 297A.70, Exemptions for government and nonprofit groups
  • subd. 2, Sales to government
  • subd. 3, Sales of certain goods and services to government
  • subd. 4, Sales to nonprofit groups
  • subd. 6, Ambulances
  • subd. 7, Hospitals, outpatient surgical centers, and critical access dental providers
• 297B.03, Motor Vehicle Exemptions

• 8130.6200, subp. 10, Volunteer fire departments

• 97-06, Exemptions for Police Car, Fire Truck, and Ambulance Accessories
• 12-09, Government Exemptions – Water Used Directly in Providing Fire Protection

• Detective and Security Services
• Isolated and Occasional Sales
• Petroleum Products
• Use Tax for Businesses

• Aircraft
• Government – State Agencies
• Government – Local Governments
• Local Sales and Use Tax
• Motor Vehicle