Minnesota – Guidance for Nurseries and Greenhouses

SALT Report 1513 – The Minnesota Department of Revenue issued sales and use tax guidance for nurseries and greenhouses.  Minnesota provides an exemption to qualified “agricultural production” businesses that purchase items to be used or consumed in the production process, whether or not they become part of the product produced.
Agricultural production includes the following activities when they result in a product that will be sold at retail:
  • Floriculture – cultivating flowering plants
  • Horticulture – cultivating fruits, vegetables, and plants
  • Silviculture – the care and cultivation of forest trees

Items that Qualify for the Exemption

Crop Inputs

  • Seeds, trees, fertilizers, and herbicides, including when purchased for use by farmers in a federal or state conservation program
  • Chemicals used in agricultural production
  • Materials, including chemicals, fuels, and electricity purchased by persons engaged in agricultural production to treat waste generated as a result of the production process
  • Soil and soil amendments including peat
  • Machinery and greenhouse fuel
  • Petroleum products and lubricants
  • Fuels, electricity, gas, and steam used or consumed in the production process. Specifically, the energy used for climate control or specialized lighting necessary to produce agricultural products
Farm Machinery
A sales tax exemption applies to new or used machinery, equipment, implements, accessories, and contrivances used directly in nursery and greenhouse production of plants for sale at retail. To qualify, the machinery must meet the definition of “farm machinery” and must be used directly in “agricultural production.”

The Fact Sheet also discusses the taxability of repair and replacement parts, ATV’s, accessories, and other items sold with nontaxable products.

To claim the exemptions use Certificate of Exemption, Form ST3.

For Further Information:

Minnesota Department of Revenue – Sales Tax Fact Sheet No. 174




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