Understanding which sales are exempt from sales tax is essential for businesses and individuals involved in the pet industry in Minnesota. Let’s delve into the details and guidelines provided by the Minnesota Department of Revenue.
Agricultural Animals:
Sales of agricultural animals are generally not taxable. This includes the sale of various animals used in agricultural practices. For more comprehensive information, we recommend referring to the Agricultural and Farming Industry Guide provided by the Minnesota Department of Revenue.
Horses:
All horses, including racehorses, working stock, and pets, are exempt from sales tax in Minnesota. This exemption also applies to various services related to horses, such as horse boarding, grooming, horse shoeing, and trimming horse hooves. These services are considered nontaxable.
Training Services:
Training services provided to an owner’s animal are not taxable. It is important to separately state the training charge from any taxable fees for boarding, feeding, or caring for the animal. Examples of training services that fall under this exemption include obedience training, protection training, and tracking.
Other Nontaxable Services:
There are several other nontaxable services within the pet industry. These include:
Animal control fees to catch or pick up an animal.
Annual licensing fees for pets.
Charges to pick up or deliver animals for reasons other than taxable services.
Pets delivered outside of Minnesota. Documentation should be kept to show that the pet was delivered out-of-state.
Sales to the Federal Government:
Sales to the federal government are not taxable. To qualify for this exemption, purchases must be billed to and directly paid for by the federal government. The buyer must provide Form ST3, Certificate of Exemption, or proof of direct billing and payment.
Sales to State and Local Governments:
State agencies cannot use their Direct Pay authorization to purchase pet boarding, lodging, and grooming services exempt from sales tax. However, local governments may purchase animal control and impound services exempt from sales tax by providing a completed Form ST3, Certificate of Exemption.
Sales to Nonprofit Organizations:
Qualifying nonprofit organizations may purchase pets and pet care services exempt from sales tax. The nonprofit buyer must provide a completed Form ST3, Certificate of Exemption.
For more detailed and specific information, we recommend referring to the official resources and guidelines provided by the Minnesota Department of Revenue Nontaxable Sales | Minnesota Department of Revenue (state.mn.us).
Get in touch with our experts at Prudent Accountants and stay informed and compliant with tax regulations to ensure accurate reporting and a smooth operation in the pet industry.
