A building or structure includes the building or structure itself and all improvements or fixtures annexed to the structure that are both:

• Integrated with and of permanent benefit to the building or structure
• Cannot be removed without substantial damage to itself or the building or structure

Maintenance means to keep an item in good working order or ensure it keeps operating safely and efficiently.

Repair means to restore an item so it can be used for its original purpose.

Services Performed within a Business

Building cleaning and maintenance services performed within a business are not taxable when:

• Services are performed by employees for an employer
• Services are provided by one business entity for another when one of the entities owns or controls at least 80% of the other entity
• Services are performed between members of an affiliated group of corporations

Sales to Nonprofits

Qualifying nonprofit organizations must give you a completed Form ST3, Certificate of Exemption to purchase services exempt from tax.

Direct Pay Authorization

A Direct Pay authorization cannot be used to buy services exempt from tax. Taxable services provided to businesses that have a direct pay authorization are taxable.

If you sell equipment or other items used in your business, the sale may be taxable. For more information, see Isolated and Occasional Sales.

Contracts for mechanical systems, such as elevators and HVAC systems, that are for cleaning are taxable building cleaning. Some items used to provide these services are not taxable. See Exempt Purchases.

Contracts for mechanical systems, such as elevators and HVAC systems, that are for repair are not taxable. Repair services must be separately stated.

Repair includes services to:

• Restore an item that was broken, worn, damaged, defective, or malfunctioning, to working order or operating condition
• Sustain or support safe, efficient, and continuous operations
• Prevent decline, failure, lapse, or deterioration. Repair services must be separately stated.

Home health care services that provide a combination of medical care, personal care, laundry, and cleaning services for one charge are exempt from sales tax. Laundry and cleaning services are considered incidental and are not taxable.

Contracts to construct, repair, alter, or improve real property are not taxable. The contractor must pay sales or use tax on any materials, supplies, equipment, or taxable services used to complete the construction contract. For more information, see Contractor and Other Property Installers.

A lump sum contract that includes items listed under “building cleaning and maintenance,” together with construction, alteration, or improvements to real property is considered a construction contract when 50% or more of the total cost of the contract is for improvement of real property.

Examples

• Fire damage requires you to wash walls, clean carpets and Venetian blinds, paint all rooms, and reconstruct several walls. Since 50% or more of the cost of the contract is for improving real property, the contract is not taxable.

Note: If the contractor hires a subcontractor to clean, the contractor must pay tax on the taxable cleaning services. However, if the cleaning is done by the contractor’s crew, no tax applies.

• Fire damage requires you to wash walls, clean carpets and Venetian blinds, and paint one of several rooms. Painting walls is not taxable if separately stated. Cleaning carpets, Venetian blinds, and washing walls are taxable. However, if the customer is billed a lump-sum amount for painting walls and the taxable services, the entire amount is taxable, since more than 50% of the contract is for taxable services.

Lighting maintenance, such as bulb and fuse replacement, is taxable. However, ballast replacement is only taxable when it is plugged in. When ballasts are hard wired, maintenance to replace them is not taxable because it is an improvement to real property.

Disinfecting and exterminating services are exempt from sales tax when the services are used to:

• Prevent or destroy insect infestation of growing crops
• Control or eradicate insects, predators, and other animal pests for the health and protection of agricultural animals

Disinfectants applied to agricultural animals or their environment for the control or eradication of animal diseases or pests are also exempt from sales tax.

The purchaser musts give you a completed Form ST3, Certificate of Exemption.

For more information, see Agricultural and Farming.

The following types of junk removal services are taxable:

• Removal of household contents or discarded items from buildings, including garages, abandoned buildings and storage units
• Cleaning and removal of household waste
• Periodic cleaning
• Maintenance of the building
• Lawn care and maintenance
• Removal of twigs and grass clippings
• Tree, bush, and stump removal

For information, see Lawn and Garden Maintenance, Tree, and Shrub Services.

The following junk removal services are not subject to sales tax:

• Waste management services provided by the city sanitation department, solid waste management service providers, or the waste control department (may be subject to Solid Waste Management Tax)
• Curbside pickup of items placed by the property owner, including yard waste (may be subject to Solid Waste Management Tax)
• Removal of appliances when being replaced, if removal service is optional
• Charges for the removal of dumpsters or dumpster bags

Note: Nontaxable services must be listed separately on the customer’s invoice.

• A bank hires a junk removal service provider to clean out a foreclosed residential property. The service provider removes abandoned property from the home and cleans out household debris. Cleaning out the contents of the building is taxable.
• A construction company removes old carpet to install a new wood floor in a home. They remove the old carpeting and haul it away. Hauling away the old carpeting is not taxable since the construction company is not in the business of junk removal.
• A contractor hires a demolition company to tear down two office buildings so an apartment building can be built on the property. The contractor hires a separate company to remove the demolition debris. The removal of the demolition debris is not taxable. The debris removal is not considered part of building and residential cleaning as long as no building remains.
• A homeowner buys a new refrigerator and pays the appliance company to deliver and install it and to remove and haul away the old refrigerator. The removal of the old refrigerator is not taxable because the appliance company is not in the business of junk removal and the removal is optional. (Removal is taxable if required.)
• A moving service provider is hired to pack the contents of a customer’s home and move them to a new home. The contents of the home are not disposed of as the mover sees fit, but are delivered to the location the customer determines. The moving service does not vacuum, sweep, or clean the customer’s home. The moving service is not taxable.

Consumable materials are items used while providing a service and are not reused afterward. Materials used or consumed in providing taxable building cleaning and maintenance, disinfecting, and exterminating services are not taxable. You must use the materials directly in providing the taxable service to qualify for the exemption.

• Chemicals to clean swimming pools
• Chemicals to treat waste generated as a result of providing the taxable service
• Cleaners, disinfectants, degreasers
• Deodorizers
• Disposable rags, paper towels
• Exterminating chemicals
• Furnace filters
• Garbage bags
• Mothballs
• Lubricants and antifreeze for vehicles used while directly providing taxable services (i.e. furnace cleaning machines)
• Pesticides
• Soaps, detergents, waxes, shampoos
• Traps (one-time use)
• Window cleaner

Note: If you purchase materials exempt from tax but use the materials to provide a nontaxable service for general business, or personal use, you owe use tax on your cost of the materials.

Separate detachable units used to provide taxable services are exempt. To qualify for the exemption, the item must meet all three requirements:

1. It must be used in providing a direct effect for a taxable service.
2. It must be an accessory or other item that attaches to a machine while in use.
3. Its ordinary useful life must be less than 12 months when used continuously in normal use by the taxable service provider.

Separate detachable units do not include the basic machine or any components included in the original purchase price. Hand tools are not separate detachable units and are taxable. Repair parts are also taxable.

Examples of separate detachable units:

• Abrasive and polishing belts
• Disposable vacuum bags, brushes, and filters (if purchased separately from the vacuum cleaner)
• Mop heads (if purchased separately from the handle)
• Polishing strips and buffers

The following purchases are subject to sales or use tax.

• 297A.61, subd. 3(g)(6)(iii), Sale and purchase
• 297A.68, subd. 3, Materials used in providing certain taxable services
• 297A.61, subd. 58, Real property

• 00-03, Exemptions: Materials Used or Consumed in Providing Taxable Services
• 02-22, Building Cleaning and Maintenance – Swimming Pools
• 09-05, Technical Corrections to Revenue Notices #02-22
• 12-02, Home Health Care Services – Combination Contracts

• Isolated and Occasional Sales
• Laundry and Cleaning Services
• Use Tax for Businesses

• Agricultural and Farming
• Contractors and Other Property Installers
• Local Sales and Use Tax