Businesses in Minnesota are tax-exempt for natural gas used in industrial processing. To be eligible for this exemption, a business must produce tangible personal property intended to be sold at the retail level.
Industrial producers include:
The "production process" includes the following activities:
- Design, research and development for production of a product
- Removal of raw materials from stock to begin production activities
- Actual production activities that effect changes to produce the product
- Testing and quality control of the product
- Placement of the product in finished goods inventory or, if the item is not placed into inventory, the last production process before loading the product for shipment
To apply for sales tax exemption, send a Minnesota Sales Tax Certificate to Minnesota Energy Resources, Commercial & Industrial Billing, P.O. Box 2176, Scottsbluff, NE 69363, or fax it to 800-889-2870.
On the certificate, in the reason for exemption section, be sure to include the percentage exemption from natural gas in the space provided next to letter N.
If you have questions about whether an exemption applies to your business, your tax accountant is your best resource. If you have questions about your current tax status with Minnesota Energy Resources, please contact us.