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Purchases Exempt purchases Purchases of certain materials used or consumed in providing taxable washing, waxing, cleaning, rust - proofing, undercoating and towing services are exempt from tax. The materials must be used directly in providing the taxable service to qualify for the exemp- tion. The following are examples of exempt purchases: • chemicals to treat waste generated as a result of providing a taxable service • deodorizers • disposable rags • electricity, natural gas and water used in providing taxable services • fabric protection chemicals • fuels to heat water • lubricants and antifreeze for vehicles used while directly providing taxable services (i.e. tow trucks) • plugs for rustproofing • rustproofing chemicals • salt or softening agents for water used in providing taxable services • soap • utilities used in provng taxable services • vacuum filters and bags • wax To claim exemption, give the vendor a Certificate of Exemption, Form ST3, and write "Materials used to provide taxable services' in Exemption Code I. The exemption described above applies only to busi- nesses providing taxable services and does not extend to individuals buying these materials for their own use. Note: If you buy materials exempt from tax but use the materials when providing a nontaxable service or an administrative function, you must pay use tax. See Use tax on page 3. Separate detachable units Separate detachable units used in providing taxable services are exempt from sales or use tax. To qualify for exemption, the item must meet all three of the following requirements: t. It must be used in providing a taxable service. z. It must be an accessory tool, equipment, or other item that attaches to a machine while in use. 3. Its ordinary useful life must be less than twelve months when used in providing taxable services under the normal use of the taxable service provid- er. Examples of separate detachable units: • abrasive and polishing belts • cutting tools • drill bits • polishing strips and buffers • saw wires or blades • vacuum filters Separate detachable units do not include the basic machine or any components included in the original purchase price. Hand tools such as hammers, pliers, clamps, wrenches, screwdrivers, crowbars, soldering irons, knives, and power hand tools, includingvacu- um cleaners, are not separate detachable units and are taxable. Repair parts are also taxable. Taxable purchases This exemption does not apply to equipment, imple- ments, tools, accessories, appliances, furniture and fixtures. It also does not apply to utilities used for space heating or lighting, or to other taxable services. Purchases of materials used for general business or administrative purposes are taxable. Pay sales tax to your supplier when you buy these items. If your supplier does not charge sales tax, you must report state and local use tax when you electron- ically file your sales and use tax return. See Use tax on page 3. The following are examples of taxable purchases: • appliances • building cleaning and maintenance services • chemicals, cleaning supplies, and water used to clean buildings and vehicles • equipment and machinery • fuel, electricity and gas used for space heating or lighting • furniture • lawn care services • linen supply or other laundry services • office supplies • repair parts • security services • specialty advertising materials • telephone service • tools • tow chains • training materials and supplies 2 Minnesota Revenue, Motor Vehicle Towing .. .