Library friends groups that have exempt status with the Minnesota Department of Revenue may purchase items they donate to the library exempt from sales tax.

The Library friends group must give their supplier a completed Form ST3, Certificate of Exemption.

For more information, see Nonprofit Organizations.

Sales of taxable goods are subject to sales tax.

Examples include:

• Compact discs
• DVDs
• Used books
• Other taxable items

Rental fees for books, films, or other items are taxable. Any late return fees for these items are taxable as an additional rental charge.

Charges for copies, including from coin-operated machines, are taxable. This is true whether the customer or library employee operates the copy machine.

The following foods are taxable when sold through a vending machine or honor box:

• Candy
• Dietary supplements
• Prepared food
• Soft drinks

For more information, see Vending Machines and Other Coin-Operated Devices.

Sales or leases of surplus equipment or other items used in a library may be taxable. For more information, see Isolated and Occasional Sales.

Qualifying nonprofit organizations may make purchases exempt from sales tax. The nonprofit buyer must give you a completed Form ST3, Certificate of Exemption. For more information, see Nonprofit Organizations.

Sales to the federal government and its agencies are not taxable. To be exempt from tax, purchases must be billed to and directly paid by the federal government. For more information, see Government – Federal Government.

State agencies can use their Direct Pay authorization to make purchases exempt from sales tax. For more information, see Government – State Agencies.

Local governments (such as cities, counties, and townships) may make most of their purchases exempt from sales tax. For more information, see Government – Local Governments.

You must pay sales tax directly to the vendor and cannot use your exemption to purchase these items:

• Prepared food, soft drinks, candy, alcoholic beverages, and catered food
• Lodging
• Waste collection and disposal services

Contractors who do work for libraries must pay tax on all materials used in the construction contract. The only exception is if the materials are used in a construction contract with an exempt entity and the entity authorizes the contractor as their purchasing agent under specific rules.

For more information, see:

• Contractors and Other Property Installers
• Revenue Notice 95-05, Construction Contracts – Purchasing Agent Exemption

Motor Vehicles

Motor vehicles purchased or leased for use as a bookmobile or delivery vehicle are exempt from sales tax.

Utilities

Utilities purchased by a library are exempt.

If the library is in a building with other offices and the library does not have its own utility meter, only the percentage of utilities used by the library is exempt. To claim exemption, give the utility provider a completed Form ST3, Certificate of Exemption specifying the government exemption for libraries.