Effective July 1, 2013, Minnesota farmers have started seeing bigger equipment repair bills. As part of the new tax legislation that was adopted this May, labor for repairs and maintenance of farm equipment is taxable. However, the replacement parts themselves remain nontaxable for farmers.
Governor Dayton has heard the complaints from the farm community. At a recent agriculture expo, the governor called for a repeal of the repair tax in a special session. Repeal of the tax could even be retroactive. In the meantime, however, farmers and farm-equipment-repair shops will need to work with the tax.
UPDATE: the farm equipment repair tax was repealed effective April 1, 2014, but was not retroactive.