Nontaxable Sales
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Nontaxable Sales
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All sales of tangible personal property and some services are taxable unless an exemption exists in statute or the purchaser provides a completed Form ST3, Certificate of Exemption.
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When an item is exempt from sales or use tax by law, the seller does not have to show why no tax was charged, but must indicate the item was food, clothing, drugs, or another exempt good.
The seller does not have to collect sales tax if the purchaser gives them a completed Form ST3, Certificate of Exemption.
Purchasers may use their own exemption certificate; it must include the customer’s:
- Name and address
- State Tax ID Number and state of issue or, as noted below:
- Federal Employer Identification Number (FEIN) if purchaser has no state Tax ID
- Driver’s license number or other state ID number, if purchaser has no state Tax ID or FEIN
- Type of business
- Reason for claiming the exemption
- Signature
Note: The purchaser must provide all of the above information. A certificate missing any of the above information may be rejected.
If an exemption certificate is misused to evade paying sales tax, we may apply a penalty of $100 to each transaction of misuse.
Form ST3 Expiration
Exemption certificates do not expire unless the information on the certificate changes. But we recommend updating exemption certificates every three to four years.
Below is a list of most nontaxable items. An exemption certificate or other documentation may be required.
| Nontaxable Sales | Additional Information |
|---|---|
| Admission tickets - to certain school and nonprofit events | |
| Advertising materials - when shipped out-of-state | |
| Agricultural items - when used in the production process | |
| Air cooling equipment - used to convert or replace ground water cooling systems | |
| Airflight equipment and parts - for certain aircraft | |
| Ambulances - when sold or leased to an ambulance service | |
| Aquaculture equipment - and certain repair and replacement parts | |
| Baby products | |
| Bullet resistant body armor - when purchased by licensed peace officers and state and local law enforcement agencies | |
| Camp fees - when the exemption requirements are met | |
| Caskets, urns for cremains, and burial vaults | |
| Cigarettes | |
| Clothing | |
| Coin-operated entertainment and amusement devices | |
| Construction labor - to construct, repair, or improve real property | |
| Construction purchases - for special projects | |
| Conversion costs - to make vehicles accessible to a person with a disability | |
| Court-reporter transcripts | |
| Cross-country ski passes - for the use of public trails | |
| Custom computer software - when prepared to the special order of the customer | |
| Deliveries outside Minnesota | |
| Detachable tools - when the exemption requirements are met | |
| Direct mail delivery or distribution charges - when listed separately on the invoice | |
| Drugs - for prescription or over-the-counter for use by humans | |
| Farm machinery - when used in the agricultural production process, including repair and replacement parts except tires | |
| Feminine hygiene products | |
| Fire-safety sprinkler systems - and all components installed into existing residential dwellings, hotels, motels, or lodging houses with four or more units | |
| Food - groceries for human consumption | |
| Fundraising sales - when made by or for a nonprofit organization and if certain criteria are met | |
| Health products | |
| Horse and horse-care supplies - including feed and medications | |
| Industrial production materials - when used or consumed in the industrial production process | |
| Instructional materials - when required to be used directly in the completion of a course of study by students at a qualifying school | |
| Interest of finance charges | |
| Logging equipment - when used in a qualifying activity, including repair or replacement parts except tires | |
| Medical equipment - for home use, including mobility enhancing equipment and prosthetic devices | |
| Memberships - for YMCA, YWCA, and Jewish Community Centers of Greater Minneapolis and St. Paul, including one-time initiation fees and periodic membership dues | |
| Mill liners, grinding rods, and grinding balls - when consumed in the production of taconite or other ores, metals, or minerals | |
| Newspapers and publications - if regularly issued every three months or less | |
| Occasional sales - of some business equipment, when exemption requirements are met | |
| Patent, trademark, and copyright drawings and documents | |
| Patient meals - served in hospitals, sanitariums, nursing homes, senior citizen's homes, correctional detention, and detoxification facilities | |
| Personal computers and related software - for use in a public or private school, college, university, or business or trade school for regularly enrolled students | |
| Petroleum products - in certain situations | |
| Pollution control equipment - in qualifying circumstances | |
| Poultry feed - to raise poultry for human consumption | |
| Prizes for games of skill of chance - for games conducted at events such as carnivals, festivals, and fairs lasting fewer than six days | |
| Public safety radio communication system | |
| Repair labor - if listed separately on the invoice | |
| Residential electricity and natural gas - during the billing months of November through April | |
| Residential utilities - provided on a year-round basis (fuel oil, coal, wood, steam, hot water, propane, LP gas, and water services) | |
| Sacramental wine - used in religious ceremonies | |
| Service materials - used or consumed in providing taxable services, including utilities and short-lived detachable tools | |
| School meals - for pre-kindergarten - 12th grade, childcare or early childhood education programs | |
| Ship repair and replacement parts and lubricants - when used by ships or vessels engaged principally in interstate or foreign commerce | |
| Ski areas - and items used or consumed directly for tramways, snowmaking, and snow grooming at ski hills, ski slopes, or ski trails | |
| Solar energy systems | |
| Special tooling - that has value and use only for the buyer and only for the use of which it was made | |
| Telecommunications and pay television equipment | |
| Textbooks - when required for classes in qualifying schools and sold to regularly enrolled students | |
| Trade-in allowances | |
| Tree, brush, and shrub removal - for contractors as part of a land-clearing contract | |
| TV commercials - and items used or consumed in pre-production, production, or post-production | |
| Unsweetened water | |
| Used mobile homes - for residential purposes | |
| Waste-management containers and compactors | |
| Wind energy conversion systems - and materials used to manufacture, install, construct, repair, or replace them |