Minnesota Capital Equipment Exemption

Do you purchase capital equipment used in a manufacturing or fabricating process? Beginning July 1, 2015, Minnesota will allow an upfront sales tax exemption on eligible capital equipment purchases, as long as an exemption certificate (Minnesota Form ST3) is presented at the time of purchase.

This exemption certificate can be found on the Minnesota Department of Revenue website. Purchases made before July 1, 2015, will still have to pay sales or use tax and request a refund.

"Capital equipment" can be defined as machinery and equipment purchased or leased, and used in Minnesota by the purchaser or lessee primarily for manufacturing, fabricating, mining, or refining tangible personal property to be sold ultimately at retail. In order to qualify, the machinery and equipment in question must be essential to the integrated process of manufacturing, fabricating, mining or refining.

If you have any questions about whether or not the equipment you are purchasing or leasing will qualify under this exemption, contact your Eide Bailly service provider or Mike Herold at 612.253.6671. For more information, visit our state and local tax website.