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Meat Processors

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Generally, meat processors are involved in two types of sales:

  • Retail sales
  • Meat processing services  

Retail Sales

A retail sale occurs when you:

  • Purchase, cut, and wrap meat for direct sale at a butcher shop or grocery store.
  • Contract with other retailers to process meat they will sell at their retail businesses.

Retail Sale Example

You process meat for a farmer who advertises meat for sale and presents themselves as a meat seller. The meat processed is considered a retail sale.

Exempt Purchases

You may purchase materials used or consumed when processing meat for retail sale exempt from sales tax because it qualifies as industrial production. This includes if it is sold at retail by you or your customer. Give your supplier a completed Form ST3, Certificate of Exemption and select the Industrial production exemption. 

Exempt purchase examples:

  • Chemicals used to clean food processing equipment
  • Utilities (electricity, gas, steam) used to operate processing equipment
  • Wrapping materials for packaging meat for sale

Exemption Percentage

If you make retail sales and provide meat processing services, only the materials used or consumed in processing meat for retail sale may be purchased exempt. Determine what percentage of your purchases qualify for exemption and give your supplier a completed Form ST3, Certificate of Exemption showing the percentage of exemption you are claiming.

Note: To support your exemption percentage, obtain a written statement from your customers confirming they sell meat at retail and keep records showing the amount of meat you processed for retail sales.

Meat Processing Services

When you process meat provided by a customer for their own use or for an occasional sale, that is considered meat processing services.

Materials used or consumed while providing meat processing services are taxable.

Meat Processing Service Example

You process meat for a farmer who does not advertise meat for sale, but they may occasionally sell meat to others. The meat processed is a meat processing sale because the farmer is not in the business of making retail sales.

Legal References and Resources

Minnesota Statutes

Publications