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Residential and Commercial Sales Tax Exemptions

Sales of electricity, gas, water or steam in Minnesota are typically taxable. However, there are some exemptions if they are used as residential heating fuel or in commercial production.

Residential sales tax exemptions

If you use electricity to heat your home, you may qualify for a Minnesota sales tax exemption. Residential members with electric heat as their primary heating system are exempt from sales tax on their November through April bills. The Minnesota Department of Revenue defines primary source of heat as the source that supplies more heat than any other source for the largest period of time during the heating season.

Read the qualification requirements on the Sales Tax Fact Sheet 157 for Residential Utilities from the Minnesota Department of Revenue. If you qualify for a sales tax exemption for electric heating, complete the form below. Connexus will contact members every 3-5 years to update their exemption status.

Residential sales tax exemption form

Commercial sales tax exemptions

Some business members may be eligible for a full or partial exemption from Minnesota sales tax. The state allows exemptions for a percentage of utilities used directly in industrial or agricultural production if it is necessary to produce a particular product and in excess of the average climate control or lighting for the production area. General space heating and lighting are excluded from this exemption.

Read the qualification requirements on the Sales Tax Fact Sheet 129 for Utilities Used in Production from the Minnesota Department of Revenue. If you qualify for a sales tax exemption, your business must complete Form ST3, Certificate of Exemption from the Minnesota Department of Revenue and submit it to Connexus.

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