Minnesota – Exemption for Towns

SALT Report 1573 – The Minnesota Department of Revenue issued a notice regarding the new sales and use tax exemption for purchases made by towns.  The new exemption repeals a duplicate exemption provided in Minnesota Statutes, section 297A.70(3)(a)(9) and repeals Revenue Notice #99-16 which explained the Department’s position on the exemptions.
The exemption for towns applies to purchases of goods and services used to provide the following:
  • Housing services,
  • Sewer and water services,
  • Waste water treatment services,
  • Ambulance services,
  • Public safety services,
  • Correctional services,
  • Chore or homemaking services for the elderly or disabled,
  • Road and maintenance services, and
  • Lighting
The exemption does not apply to purchases made by contractors performing services on behalf of a town or for any goods or services provided by a private business, which would be normally be taxable to a private business.
Although the new exemption does not apply to the motor vehicle sales tax, a town may still purchase snowplows, dump trucks, and gravel equipment that will be used to maintain roads exempt from the motor vehicle sales tax.
In order for the town to make exempt purchases of goods and services Form ST3 must provide to the retailer.
For Further Information: