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.