How to Fill Out Minnesota Form ST-3: Reason Codes and Signing

To fill out Minnesota Form ST-3, the Certificate of Exemption, enter your business name, address, and Minnesota Tax ID; describe your type of business; check the single lettered reason code that matches why the purchase qualifies; decide whether the certificate covers one purchase or all future qualifying purchases from that seller; then sign and hand it to the seller. You do not send the form to the Minnesota Department of Revenue. The seller keeps it as proof for not collecting the state’s 6.875% sales tax.¹ The form is a free PDF on the Department of Revenue’s site.²

Confirm You Qualify Before You Start

Every ST-3 turns on a single lettered reason code. Pick the one that actually describes your purchase, because the signature line makes you personally responsible for any tax, interest, and penalties if the exemption doesn’t hold up.¹

A — Federal government purchase.
B — State, local, or other government entity with a qualifying exemption.
C — Purchases by a named tribal government.
D — Foreign diplomat (identified by diplomat number).
E — Charitable organization operated exclusively for charitable purposes.
F — Educational organization operated exclusively for educational purposes.
G — Religious organization operated exclusively for religious purposes.
H — Resale in the normal course of business.
I — Qualifying capital equipment used primarily for manufacturing, fabricating, mining, or refining goods for retail sale, where the equipment is essential to production.
J — Materials and supplies used or consumed in agricultural production.
K — Materials consumed during industrial manufacturing.
L — Direct pay authorization (buyer holds a permit to pay tax directly to the state).
M — Multiple points of use: services, digital goods, or electronically delivered software used in more than one taxing jurisdiction.
N — Direct mail qualifying for special sourcing treatment.
O — Other numbered exemption from the form’s instructions.
P — Percentage exemption, where only a stated portion of the purchase is exempt.

Resale (Code H) is the most common. It prevents the same item from being taxed twice: once as inventory to the retailer and again on the sale to the consumer. Agricultural, industrial, and capital equipment codes work the same way for inputs that feed into a taxable end product. If you plan to use the goods yourself, Code H is not the right answer.

Complete the Purchaser Section

Start with your legal business name and full address. Then enter an identification number. Minnesota Statutes section 297A.72 sets a hierarchy for which number to use, and skipping a required element gives the seller grounds to charge you tax anyway.³

First, your Minnesota Tax ID, a seven-digit number from the Department of Revenue.⁴
If you don’t have one, a tax ID number from another state, with that state named.
If neither applies, your federal Employer Identification Number.
As a last resort, a valid driver’s license or state ID number, plus the issuing state.

Don’t have a Minnesota Tax ID yet? You can register online through the Department of Revenue’s Business Tax Registration portal at no cost.⁴

Describe Your Business and Check the Reason Code

Write in your type of business, such as retailer, manufacturer, nonprofit, or government agency. Then check exactly one lettered reason code from the list above. If Code O (Other) or Code P (Percentage) applies, follow the form’s instructions to add the numbered exemption or the exempt percentage.

Choose Single Purchase or Blanket

The form works two ways. A blanket certificate is the default and covers all future qualifying purchases from that seller until you cancel it. Blanket certificates have no hard expiration, but the Department of Revenue recommends refreshing them every three to five years. Any time your business name, address, tax ID, or business type changes, issue a replacement certificate right away instead of waiting.

For a one-time exemption, check the single-purchase box and write in the related invoice or purchase order number.¹

Sign and Deliver to the Seller

An authorized person signs and dates the form. The declaration confirms the information is correct and puts the signer on notice about liability for use tax, interest, and penalties if the exemption doesn’t apply.¹

Give the completed certificate to the seller in person, by mail, or as a scanned electronic file. The seller keeps it and stops charging you the 6.875% tax on qualifying invoices.¹

Timing matters for the seller’s records. Under section 297A.665, the seller should collect the certificate at the time of sale or within 90 days after. If the Department of Revenue later asks the seller to back up the exemption, the seller has 120 days from that request to obtain a properly completed certificate.⁵ Getting your ST-3 to the seller promptly avoids that problem.

What If the Seller Refuses the Certificate

Some sellers won’t accept an ST-3, particularly for less familiar exemption categories. When that happens, pay the tax and pursue a refund. Refund claims of more than $500 go to the Department of Revenue on Form ST11, the Sales and Use Tax Refund Request. Amounts of $500 or less have to be requested from the vendor.⁶

To file an ST11, you must be registered for Minnesota sales or use tax, and you’re limited to two purchaser refund requests per calendar year. Submit the form with a supporting worksheet, invoices, and proof of payment. The deadline is three and a half years from the 20th day of the month after the invoice date.⁶

Penalties for Claiming an Exemption You Don’t Qualify For

The civil penalty is $100 per transaction where you used the certificate to buy something that didn’t qualify, with intent to avoid paying tax to the seller.⁷ You also owe the unpaid tax plus interest. A blanket certificate handed to several vendors can generate that $100 many times over.

Willful evasion is a felony under section 289A.63, whether by filing a false certificate, failing to remit tax you collected, or helping prepare a fraudulent document. Charges can be brought up to six years after the offense, and the criminal penalties apply on top of the civil ones. Officers and employees of a corporation or partnership can be held personally liable if they had a duty to handle the tax.⁸

Keep a Copy

Both buyers and sellers have to retain exemption certificates and supporting records for at least three and a half years, matching the general statute of limitations for the Department of Revenue to assess additional sales tax. Minnesota Rule 8130.7501 ties the retention period to that same window. Filing a false return or underreporting by more than 25% extends the assessment period to six and a half years, and your record retention has to follow.⁹

Electronic storage is allowed. If asked, you need to show how your system creates and preserves the records, how the data flows, and what controls prevent unauthorized changes.¹⁰ A folder of scanned PDFs works for most audits, as long as you can pull up any certificate quickly.

1
Minnesota Department of Revenue. Minnesota Form ST-3 Certificate of Exemption
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Minnesota Department of Revenue. Form ST3, Certificate of Exemption
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Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.72 – Exemption Certificates
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Minnesota Department of Revenue. Minnesota Tax ID Requirements
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Minnesota Office of the Revisor of Statutes. Minnesota Code 297A.665 – Presumption of Tax; Burden of Proof
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Minnesota Department of Revenue. Sales and Use Tax Refund Request (Form ST11)
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Minnesota Office of the Revisor of Statutes. Minnesota Code 289A.60 – Civil Penalties
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Minnesota Office of the Revisor of Statutes. Minnesota Code 289A.63 – Criminal Penalties
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Minnesota Office of the Revisor of Statutes. Minnesota Code 289A.38 – Limitations on Time for Assessment of Tax
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Cornell Law Institute. Minnesota Rule 8130.7501 – Returns and Records