Machinery and Equipment

Repair and replacement parts for farm machinery are exempt from tax, except for tires (which are taxable). The exemption applies to repair or replacement parts installed in place of a part that has a specific or generic part number assigned by the farm machinery manufacturer

Accessory tools, equipment, and other short-lived items are exempt if they meet all of following requirements:

• Are separate, detachable units
• Produce a direct effect on the agricultural product
• Have a useful life of less than 12 months when continuously used in production under normal conditions

Examples include:

• Milk filter discs
• Mower sickle sections

Primary and backup generators are exempt if they are used to generate electricity to:

• Operate farm machinery
• Provide light or space heating that is essential to the production of livestock, dairy animals and products, or poultry and poultry products.

However, generators used for general heating or lighting are taxable.

Machinery or equipment that is part of a manure handling system is exempt, including:

• Agitators
• Hoses
• Pumps
• Spreaders
• Valves

The following items are taxable:

• Concrete pits
• Slotted flooring
• Other items that are part of the livestock building structure

Grain drying equipment used in agricultural production is exempt, including:

• Dryers
• Drying system components
• Similar types of equipment

The following items are taxable:

• Grain bins
• Grain hoppers
• Equipment used for storage of grain
• Silos

Grain hopper tanks and bins are not grain dryers. This is true even if some drying occurs in the grain hopper tanks and bins, or if there are component parts such as ladders connecting the bin to a grain dryer.

The purchase of a grain hopper tank or bin is taxable unless they are sold installed because the installation is considered an improvement to real property. In that case, the contractor (installer) does not charge sales tax on the installed tank or bin. But the installer must pay sales tax on the cost of any materials and supplies used to install the item.

For more information, see Contractors and Other Property Installers.

Sales and use tax do not apply to aircraft used directly and principally for agricultural spraying. However, you must register the aircraft with the Minnesota Department of Transportation and pay the registration tax.

Machinery purchased by an individual or a business to perform part of the agricultural production process is exempt from sales tax. Examples include:

• Custom combining
• Harvesting
• Planting
• Spraying

Qualifying equipment used in aquaculture production is exempt from sales tax. Examples include:

• Automatic feed systems
• Fish counting devices
• Net pens
• Oxygen generators
• Water diversion devices

Note: To qualify for the exemption the licensed aquatic farm must own the aquatic life.