How to Complete Minnesota Form ST3 Certificate of Exemption

Minnesota Form ST3, the state’s Certificate of Exemption, is the document a buyer gives a seller to purchase goods or services without paying Minnesota’s 6.875 percent sales tax. When you hand over a completed ST3, you take legal responsibility for the exemption claim, and the seller is relieved of the duty to collect tax on that sale.¹

Do You Qualify to Use ST3

Minnesota’s exemptions fall into two groups: exemptions based on how you will use the item, and exemptions based on who you are. Each has its own reason code on the form, and picking the right one is the first real decision you make.

The most common claim is resale. A retailer buying inventory from a wholesaler uses code H to avoid tax on goods that will be taxed when sold to the final customer.

Farmers and ranchers use code J. Minnesota law exempts feeds, seeds, fertilizers, herbicides, chemicals, fuels, petroleum products, and packaging materials used in agricultural production, provided the end product is intended for sale. The exemption also covers materials veterinarians use on agricultural production animals, and horse feed and bedding whether or not the horses are raised for sale.²

Industrial manufacturers use code K for materials that become ingredients or components of a finished product for retail sale. The item has to play a direct role in production. Office supplies for a factory don’t qualify even though the buyer is a manufacturer.

Buyer-based exemptions run under Minnesota Statutes Section 297A.70. Purchases by the federal government, school districts, state universities, local governments, public libraries, and hospitals or nursing homes operated by political subdivisions are exempt. Other states can also buy tax-free, but only if the sale would have been exempt in that state.³

Nonprofits organized and operated exclusively for charitable, religious, or educational purposes can buy tax-free when the items support those functions. The form separates them by code: E for charitable, F for educational, G for religious. Tribal governments use C, and foreign diplomats use D. In total, the form lists sixteen reason codes, A through P.

What a Fully Completed ST3 Must Contain

Minnesota Statutes Section 297A.72 spells out what “fully completed” means. Any blank required field makes the certificate incomplete, and an incomplete certificate gives the seller no legal cover.⁴ The form requires five things:

Purchaser name and address. Use your full legal name and the business address on file with the state.
Type of business. A two-digit code from a list prescribed by the commissioner, covering categories such as agriculture, construction, manufacturing, retail trade, government, and nonprofit organizations.¹
Identification number. The statute sets a strict order. Use your Minnesota tax ID if you have one. If not, a tax ID from another state. If neither, a federal Employer Identification Number. As a last resort, a valid state-issued driver’s license or ID number.⁴
Reason for exemption. One of the sixteen letter codes (A–P) identifying the legal basis for the claim.
Signature. Paper forms must be signed by the purchaser. Electronic certificates must meet the state’s electronic signature requirements under Section 270C.304.⁴

You can download the form directly from the Minnesota Department of Revenue. Minnesota also accepts the Streamlined Sales Tax Exemption Certificate (SSTGB Form F0003), a standardized certificate recognized across all 24 member states of the Streamlined Sales Tax Agreement.⁵ Either form works for a Minnesota purchase.

Getting the Certificate to the Seller

The seller needs the completed form in hand to make the sale tax-free. A physical copy at the register works, and so does an electronic version such as a scanned PDF by email. If the seller does not have the certificate at the time of sale, they are required to charge tax.¹

Sellers are expected to check that every required field is filled in before accepting the form. Missing a signature, an ID number, or a reason code makes the certificate invalid on its face.

Blanket Certificates for Repeat Purchases

If you buy from the same vendor regularly, you don’t need a new ST3 for every transaction. Minnesota recognizes blanket exemption certificates that cover continuing future purchases from a single seller.⁴ Once a blanket certificate is on file, the seller applies the exemption to qualifying sales without asking again.

You still have to keep the information current. If your address changes, your tax ID is updated, or the nature of your exempt purchases changes, give the seller a fresh certificate. Minnesota exemption certificates don’t have a fixed expiration date, but the Department of Revenue recommends updating them every three to four years.⁶

Records You Need to Keep

Both the buyer and the seller must retain a copy of every completed ST3. Minnesota tax records must be kept at least three and a half years from the date the related return was due.⁷ If the Department of Revenue asks for a certificate during an audit and you cannot produce it, the exemption can be denied and you owe back tax, interest, and penalties. Digital or paper storage both work.

Penalties for Using ST3 on Purchases That Don’t Qualify

Claiming an exemption you aren’t entitled to has real cost. Minnesota imposes a $100 penalty for each transaction where a certificate was used to evade tax.⁸ The penalty is per transaction, so misuse across dozens of purchases adds up quickly.

On top of that, the buyer is personally liable for the use tax that should have been paid, plus interest and additional penalties. The form itself puts the responsibility on you to know whether you qualify. For late payment of sales or use tax, the state adds a 5 percent penalty for the first 30 days and another 5 percent for each 30-day period after that, up to 15 percent.⁸

1
Minnesota Department of Revenue. Form ST3 – Certificate of Exemption
2
Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.69 – Agricultural and Industrial Production Exemptions
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Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.70 – Exemptions for Governments and Nonprofit Groups
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Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.72 – Exemption Certificate Requirements
5
Streamlined Sales Tax Governing Board. Exemptions
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Minnesota Department of Revenue. Nontaxable Sales
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Minnesota Office of the Revisor of Statutes. Minnesota Code 289A.40 – Periods of Limitation on Claims for Refund
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Minnesota Office of the Revisor of Statutes. Minnesota Code 289A.60 – Civil Penalties