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Last Updated: 8/4/2017

Sales

Taxable sales

Any nonprofit organization that makes taxable sales must collect and remit sales tax unless one of the following apply:

  • The state’s fundraising exemption applies (see Fundraising Sales)
  • The sales qualify for another exemption

Taxable sales include:

  • Gift shop sales at a nonprofit museum.
  • Sales of used furniture, appliances, and other items operated by a nonprofit organization.
  • Sales of books, manuals, CDs, and other taxable literature to organization members on a regular basis.

When you purchase items for resale (inventory items) do not pay sales tax on them. Instead, give your supplier a completed Form ST3, Certificate of Exemption. Specify the Resale exemption.

Local sales tax

Some cities and counties have local sales and use taxes. You must charge any local sales taxes that apply if your business is located in, or delivers to, an area that has them.

To determine the sales tax rate, use the location where the product is received by the customer – typically your business or a delivery address. You can use the Sales Tax Rate Calculator to help you determine the rate.

Note: The rate calculator does not include special local taxes (such as local lodging or liquor taxes). 

For more information, see:

Nontaxable sales

Nonprofit admissions tickets

Tickets or admissions to certain nonprofit activities are exempt from sales tax. Examples include:

  • Community theater tickets
  • Nonprofit museum tickets

Admissions tickets are not taxable if the following requirements are met:

  1. The organization's primary mission is to provide an opportunity for state residents to participate in the creation, performance, or appreciation of the arts.
  2. The organization is one of the following:
      • A 501(c)(3) organization that received at least 5 percent of its revenue from voluntary contributions in its most recent fiscal year (or current fiscal year if the organization has not completed a full year).
      • A municipal board that promotes cultural and arts activities.
      • Part of a state college or university (including the University of Minnesota), or a private nonprofit college or university that owns the facility where the event is being held.

Examples

  • A historical society opening a historically preserved home provides an annual art fair for an additional fee. Art fair admissions are taxable. However, admission charges to the home are not taxable if separately stated on the customer bill or invoice.
  • A nonprofit museum provides birthday parties for an additional fee. Party charges, such as pizza and party favors, are taxable. However, museum admission charges are not taxable if separately stated on the customer bill or invoice.

Memberships

Starting July 1, 2017, sales of memberships to qualifying “nonprofit organizations offering similar services” to the YMCA, YWCA, or JCC are exempt from sales tax. Nonprofit organizations offering similar services means:

  • An exempt organization under section 501(c)(3) of the Internal Revenue Code
  • Whose mission is to support youth and families through a variety of activities (including memberships allowing access to athletic facilities)
  • Who provide free or reduced-price memberships to seniors or low-income persons or families

The exemption includes one-time initiation fees and periodic membership dues. Previously, only sales of memberships to the YMCA, YWCA, and JCC qualified for the exemption.

Separate charges for access to and use of the organization’s sports and athletic facilities are taxable. For example, swimming pool admissions, racquetball, and tennis court charges are taxable.

< Qualifying for Minnesota Nonprofit Exempt Status – Sales Tax Fundraising Sales >
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