Purchases Exempt from Sales Tax
The University of Minnesota has a very broad sales tax exemption covering most purchases with the exception of prepared food, candy, soft drinks, lodging, motor vehicles and solid waste disposal services. If the University is directly paying for the purchase, no sales tax should be charged.

Retailers generally require documentation that the purchaser is exempt from sales tax. Sometimes retailers ask for a Minnesota ST3 exemption certificate as evidence that the purchase is exempt from Minnesota sales tax. As long as the University is directly paying for the purchase, the ST3 may be provided to the retailer. Other retailers review the ST3 once and issue an exempt number rather than reviewing the ST3 for every sale; this streamlines the checkout process. The exempt number may be used at their stores for any purchases made by the University. Some stores require that you get an exempt number from them before making exempt purchases.

It is essential that the P-Card be used when making the exempt purchases. If an individual uses a personal credit card, or writes a check for a purchase, and is then reimbursed by the University, it is not considered a University purchase for sales tax purposes. The sale is subject to tax. Additionally, many University Departments do not reimburse sales tax unless the purchase is of an emergency nature.

Not all retailers consistently enforce these procedures. They may not charge tax when an individual writes a personal check and presents an ST3.

If an individual pays for a purchase personally and presents the ST3, the individual is considered as using the exemption certificate for purposes other than the claimed exemption. The penalty provisions of the sales tax laws suggest that the individual could be subject to a penalty of $100 for each transaction. The potential for this penalty coupled with the fact that an individual may not be reimbursed for sales tax paid make it imperative that the P-Card be used for all University purchases that are exempt from sales tax.

The University currently has retailer exemption/account numbers with several common retailers. If you print out the ST3 from the Forms Library, the retailer exemption account numbers will print out as a second page following the ST3, and a list will also be available on our website here.

If you need exempt numbers for other retailers, please contact the Tax Department at 4-1053 or at taxhelp@umn.edu One number for the entire University may be applied for and added to these lists.