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Nontaxable Purchases

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You may buy certain items for your business without paying sales tax by giving your vendor a completed Form ST3, Certificate of Exemption. These exemptions depend on the type of item purchased and how it’s used in your business.

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Nontaxable Purchases [+]

The following purchases are not subject to sales or use tax.

Nontaxable Purchases	Description
Air time	Placement of a commercial at a theater or on the radio, TV, or a website is not taxable. In this case, no certificate of exemption is required.
Resale	Items that you will resell to your customers – as is or as part of the finished product – are exempt from sales tax. Examples include stock video footage or voice-overs.
TV commercials	Materials and labor you buy and use to produce a TV commercial are exempt from sales tax. For details, see TV Commercials.
Materials and supplies	Materials and supplies are exempt from sales tax if they are used in an industrial production process – that is, consumed or destroyed in the process of creating a tangible product.
Capital equipment	Certain equipment used to create a tangible product for retail sale is exempt from sales tax. For more information, see Capital Equipment.

Note: These exemptions do not apply to purchases used to create nontaxable advertising services.

Capital Equipment [+]

Purchases of capital equipment are exempt from sales tax if the equipment is used in both of the following ways:

to create a tangible product for retail sale
in Minnesota for at least half of its operating time

Examples of capital equipment used in video production that may qualify include

cameras	lighting equipment
props	printing equipment
backdrops	recording equipment
editing equipment	production computers and software
processing equipment	accessories and attachments for production equipment

Note: Equipment is taxable if it’s used in one of the following ways.

to produce photography that is electronically delivered to a customer

to provide nontaxable advertising services.

For more information, see Capital Equipment.

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Nontaxable Purchases