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Towing, Cleaning, and Rustproofing Services


Towing, cleaning, and rustproofing services to a motor vehicle are taxable unless an exemption applies. Some items used and consumed in the taxable service may be purchased exempt. See Exempt Purchases.

Towing Services

The total price charged for towing a motor vehicle is taxable, including administrative fees relating to the service. For example, if charges for calling authorities, check cashing, and completing insurance forms are included, the total amount is taxable, even if those charges are separately stated. If tax is included in the total amount rather than separately states, the invoice must state that tax is included.

Taxable Towing Services

The following towing services are taxable:

  • Towing, pulling, or transporting motor vehicle on a flatbed truck to any location
  • Towing snowbirds or other illegally parked motor vehicles to impound lots
  • Pulling or winching motor vehicles out of ditches
  • Recovery services, such as up righting overturned semi tractors, trailers, or other motor vehicles

Nontaxable Services

The following are nontaxable towing services:

  • Decking or stacking
  • Delivering fuel to stranded motorists
  • Jump starting vehicles
  • Roadside repair
  • Tire repair or other repair services on the road
  • Towing boats
  • Towing construction equipment or other equipment or machines not licensed for road use
  • Towing farm tractors or farm wagons
  • Towing auto hulks

Sales Tax Sourcing on Towing

Sales tax applies to the towing fees based on where the towing service began.

Example: A towing company in Maple Grove sends a tow truck to pick up a car in Minneapolis. The tow truck delivers the car to a body shop in Maple Grove. The towing service is subject to the tax rate in Minneapolis where the towing service began.

Cleaning, Rustproofing, and Undercoating Services

The following services provided to a motor vehicle are taxable:

  • Applying fabric protector
  • Cleaning services (interior, exterior)
  • Coin-operated car washes and vacuums
  • Rustproofing
  • Undercoating
  • Vacuuming
  • Washing
  • Waxing

Free Car Wash

The customer owes no sales tax on a free car wash. However, you owe sales or use tax on the cost of the materials to provide the free car wash.

Exempt Purchases

Some materials used or consumed in providing taxable washing, waxing, cleaning, rustproofing, undercoating, and towing services are exempt from tax. You must use the materials directly in providing the service to qualify for the exemption.

Give your vendor a completed Form ST3, Certificate of Exemption. Specify the Resale exemption. 

Examples of materials include:

  • Chemicals to treat waste generated as a result of providing a taxable service
  • Deodorizers
  • Disposable rags
  • Electricity, natural gas, and water used in providing the service
  • Fabric protection chemicals
  • Fuels to heat water
  • Lubricants and antifreeze used in vehicles providing a taxable service (tow trucks)
  • Plugs for rustproofing
  • Rustproofing chemicals
  • Salt or softening agents for water
  • Soap
  • Vacuum filters and bags
  • Wax

Separate Detachable Units

Separate detachable units used to provide taxable services are exempt from tax. To qualify, the item must meet the following requirements:

  • It must be used to provide a taxable service.
  • It must be an accessory tool, equipment, or other item that attaches to a machine while in use.
  • Its ordinary useful life must be less than 12 months when used to provide taxable services under the normal use of the provider.

Examples of separate detachable units:

  • Abrasive and polishing belts
  • Cutting tools
  • Drill bits
  • Polishing strips and buffers
  • Saw wires or blades
  • Vacuum filters

Taxable items include:

  • Clamps
  • Crowbars
  • Hand tools (hammers, pliers, screwdrivers, wrenches)
  • Knives
  • Repair parts
  • Soldering irons
  • Vacuum cleaners

For more information, see the Sales and Use Tax Business Guide.

Legal References and Resources

Minnesota Statutes

Minnesota Rules

Fact Sheets