The Minnesota Department of Revenue just announced that starting July 1, 2015, the capital equipment refund will become an up-front sales tax exemption. This announcement is favorable sales tax law change for all Minnesota manufacturers.
To claim the exemption on eligible purchases, businesses must give the supplier a completed Form ST3, Certificate of Exemption. Use exemption reason code for “Capital equipment”. Businesses also must confirm that they have filed their refund claims for open periods.
Before July 1, businesses were required to pay sales tax when purchasing eligible capital equipment and then file a refund request with the Department of Revenue.
Note: If you pay sales tax on purchases after June 30, 2015, you may still file a refund request for tax paid in error.
If you have any questions on the new sales tax law change, please reach out to our Tax Practice Leader, Ron Price, at email@example.com or 612.376.1268.