Homeowners who use electricity as their primary residential space heat (50% or more) are exempt from sales tax for the November through April billing months.
If you have a separate meter used solely or primarily to measure heating, then only the electricity going through that meter is exempt from sales tax. For example, only the usage on an off-peak meter is exempt.
Your total bill is exempt for the six-month period if electricity is your primary heat source but you have only one meter for both general usage and electric heat.
Some of our customers use electricity as their primary heat but only a small portion of their electric heat registers on a separate meter. They also qualify for the total sales tax exemption during the heating months.
You will not be billed for Minnesota sales tax on your November statement if you meet the requirements and you currently have an exemption certificate on file at your cooperative's office.
If you are unsure of your sales tax status, please call during business hours (Monday through Friday, 8 a.m. to 4:30 p.m.) at 1-800-244-5709.
Members receiving a tax credit for electric heating when electric heat is not their primary source of heat are in violation of the sales tax law. Please notify your cooperative if you change from electric heat to some other heating source.
Minnesota Statute 297A.25, Subd. 9, provides a sales tax exemption for utilities consumed in agricultural or industrial production. The exemption does not apply to service businesses or restaurants.
Utilities, such as electricity, used by industries to produce items that are ultimately sold at retail are exempt from sales tax if the utilities are used directly in the production process. The exemption does not include utilities used for space heat and lighting of the production area, or of office, administration or other non-production areas.
To claim the exemption, you must provide the utility a completed Form ST-3 (included below).
If your production and non-production equipment are not metered separately, you will need to do an energy study to determine the percentage of exempt utility usage. Sales Tax Fact Sheet 129, Utilities Used in Production, briefly outlines how each type of energy study is done. It is designed to help you choose an appropriate method.
Forms and fact sheets are available from the MN Dept. of Revenue at 1-651-296-6181. You can also download these forms, and any other tax forms and Minnesota tax information, by visiting the MN Dept. of Revenue's website at https://www.revenue.state.mn.us/.
