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Last Updated: 6/1/2017

Nontaxable Sales

Certain services and sales are not taxable. Some examples include:

  • Coat check
  • Messenger service
  • Rentals of meeting rooms or banquet halls
  • Rented space for vendors (Note: Sales tax is due on the portion of the rent that is attributable to use of the equipment, phones, furniture, parking spaces, etc.)
  • Vending machine sales of clothing (swimsuits, pantyhose, etc.), feminine hygiene products, aspirin and other drugs, and postage stamps.

Cancellation charges

Cancellation charges are not taxable because the room was cancelled; no sale occurred and no sales tax is due.

Gift certificates and gift card sales

Gift certificates and gift cards are not taxable when sold. When a customer redeems a gift certificate or gift card, charge sales tax on any taxable portion of the purchase. Apply the amount of the gift certificate or card as a cash payment.

Sales to school and nonprofits

Lodging is taxable when sold to schools, school districts, and nonprofit organizations, even when billed directly to the school or nonprofit organization. They cannot use Form ST3, Certificate of Exemption, to purchase lodging exempt from sales tax.

Direct Pay Authorization

Businesses cannot use their Direct Pay authorization to buy lodging, meals, or other services exempt from tax.

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