Are you purchasing products in the state of Minnesota for the purpose of resale? If so, you can usually avoid paying sales tax when buying those items by presenting a Minnesota resale certificate.
For Minnesota, the process is pretty straightforward—you’ll need to complete a Minnesota form ST-3 – Certificate of Exemption and present it to the merchant when buying goods to be resold.
Here’s a quick guide to give you the basics of what you need to know to obtain and use a Minnesota Sales Tax Resale Certificate and what to do if your customer presents the same form when buying from your business.
If you Wish to Use a Minnesota Resale Certificate
Minnesota uses form ST3 – Certificate of Exemption as a resale certificate. To complete form ST3 you will need to provide either your Minnesota Tax ID number, your Federal Employer Identification Number, or your state Driver’s License or Identification Card number.
You’ll also need to list your business type, reason for exemption, and note if this form will be used for a one-time purchase or you are a contractor with a purchasing agent agreement with an exempt organization. Once you have completed and signed form ST3 you’ll need to present it to the vendor for their files.
Be sure you are using the Minnesota Certificate of Exemption for a valid purpose (i.e. to buy items you intend to resale). In Minnesota, you as the purchaser are responsible for paying any sales tax you should have paid but didn’t as the result of presenting a resale certificate. You can always contact the Minnesota Department of Revenue if you have questions about using a resale certificate.
Also keep in mind that if you are registered for a Minnesota sales tax permit you are also required to collect sales tax from your Minnesota buyers.
If you are Presented with a Minnesota Resale Certificate
If you are a retail business with nexus in Minnesota and a purchaser gives you a form ST3 – Certificate of Exemption to buy items for resale, you’ll need to make sure that the purchaser has completed and signed the document. From there, retain either the form itself or the data from the form for your records.
Any questions about the form itself should be directed to the Minnesota Department of Revenue. You can email them or call them directly at 651-296-6181 or 1-800-657-3777. Unlike in many other states, in Minnesota, the purchaser and not the seller is responsible for paying sales tax if they use the Certificate of Exemption incorrectly.
Hopefully you’ve now seen that using a resale certificate in Minnesota isn’t very painful. I hope this guide has made the process clear, but if you’d like to share your experience or have further questions, please start the conversation in the comments below. Want to learn more about how TaxJar automates sales tax? Get started here!
