Certain items and services are exempt from sales tax in the state of Minnesota. Materials used in agricultural productions such as maple-syrup harvesting, horticulture, aquaculture and farming are considered by the state to be items that farmers do not have to pay taxes for. This includes farm machinery and its repair, utilities such as gas and electricity, as well as horses and other supplies. Filing for tax exemption forms can be done annually, quarterly, monthly, seasonally or for a one-time only purchase.
Fill out the business name, address and state tax ID number of your farm at the section indicated at the top portion of the ST3 Certificate of Exemption. Fill out the name of the business or seller that you are purchasing a non-taxable item from in the area provided beneath your farm information.
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The next portion asks that you write down the nature of your business and the types of items that you normally sell. Write down that your business is a farm and what it is that you typically sell and purchase.
Write down the type or kinds of items that you are purchasing that are exempt from state sales tax. Animals that are exempt from tax include poultry, honey bees, fish, cattle, sheep, pigs, goats or other types of animals raised for sale including fur bearing animals such as deer and elk, ostriches, emus, rheas and llamas. Horses that are intended for work or pets as well as their feed, bedding, horseshoes, costs to breed and keep them are not taxable. In addition, the sale and purchase of animals used for research and development are not taxable. Artificial insemination items such as semen, liquid nitrogen, inseminating gloves and catheters are exempt from tax. All feed, feed additives and feed supplements are exempt from tax as well as veterinary services. Other types of tax-exempt items include fertilizer chemicals, pesticides and sanitizing agents used on the farm.
Circle A for the exemption code for farmers, which is agricultural production. Then sign and date the certificate.
Place the completed Certificate of Exemption with the rest of your tax records in a safe place where they will not be lost. The tax-exempt form should be included in the sale tax forms that your farm will file with the state.
Determine when you need to file your taxes and exemption form by reading the following list.
If your total paid sales tax is less than $100 file it annually.
Annual filing is due February 5th of the following year. If your total paid sales tax is less than $500 a month file it quarterly.
Quarterly due dates are April 20, July 20, October 20 and January 20. If your total sales tax is more than $500 a month file it monthly. The due date for monthly filing is the 20th of every month.
Seasonal filing is for businesses not open year round and is filed on February 20th.
One-time filing is for taxable sales in the state that only occur during one month or at a single event in Minnesota. It should be filed on February 20th as well.
Mail in your tax exemption form to the address provided in Resources.
Download the agricultural sales tax fact sheet for an in-depth explanation of what can be claimed as exempt from tax on your farm. The utility tax exemption fact sheet and an industrial fact sheet are available as well.
The sale and purchase of working stock, such as mules, herd dogs and oxen are taxable sales. The purchase and sale of pets are taxable as well, and this includes the purchase or selling of farm dogs mean for security purposes.
Breeding stock is not taxable only if the sale of their offspring is not taxable, such as the sale of a breeder rabbit to a person who sells rabbits for food. If the breeder rabbit is sold to a person who sells them for pets, it is taxable.
Agricultural production such as cultivating soil, raising and harvesting crops and rearing, feeding and managing animals are activities that are exempt from tax when they become a product that will be sold at retail. This does not include processing crops at co-ops, grain elevators, meat packers, dairies or raising animals for personal use. Attempting to claim tax exemption on purchases that are not exempt from sales tax could have legal consequences and penalties.
Things You'll Need
Form ST3 exemption certificate
Minnesota state tax ID number
Tax-exempt receipts and invoices