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Petroleum Tax Exemption on Gasoline Sales to Farmers
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Petroleum Tax Fact Sheet 100
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Gasoline sold and delivered to on-farm bulk storage for farm use may be sold tax free. Sales of alternative fuels and undyed diesel fuel are not included in this exemption.
In order for gasoline sales to be claimed tax free, the following requirements must be met:
- The gasoline must be delivered to a farm for farm use
- Sales tickets must clearly reflect the purchaser’s name and complete address (tickets prepared with CASH as the purchaser will not be accepted)
- Invoices must clearly indicate that the gasoline was sold tax free
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You must obtain a sales ticket or invoice for each purchase made during the claim period, regardless of amount. Do not send receipts with your claim.
The name and address of the dealer must be machine-printed or rubber-stamped on each sales ticket or invoice. Each sales ticket or invoice must be machine-numbered and must also show:
- The name of the purchaser
- Date of sale
- Number of gallons
- Type of product
- Price per gallon
- Amount of tax
Keep accurate records of all your sales tickets/invoices for at least 3.5 years. Documentation must be made available to the department upon request.
Claims must be filed within one year from the date of purchase. The postmark date is considered the filing date. Each claim must cover only one month.
Gasoline for Off-Highway Use
If the gasoline is used for off-highway use or in a nonlicensed piece of equipment, the gasoline may not be sold tax free.
For example, the gasoline used in a tractor that is not used on a farm is not a tax-free sale.
Other Gasoline Sales
Gasoline sold to these businesses do not qualify for tax-free sales from distributors:
- Ag tiling companies
- Cemeteries
- Construction companies
- Game refuges
- Grain elevators
- Golf courses
- Landscapers
- Local units of government
- Loggers
- Marinas
- Nonprofit organizations
Refund Eligibility for Purchasers
While gasoline cannot be sold tax free for off-highway use or to certain businesses, distributors may inform purchasers that they may be eligible for a refund on the tax paid if the gasoline is used off-highway for a business purpose. Eligible purchasers may complete Form PDR-1, Minnesota Motor Fuel Claim for Refund.
Note: The fact that gasoline may be subject to a refund is not a reason to sell the gasoline tax free.
