Purchases

If you have Nonprofit Exempt Status

• The exemption is limited to items used to perform the charitable, religious, or educational functions of the nonprofit organization.
• Purchases must be made and paid for directly by the nonprofit organization.
• To claim the exemption, give your supplier a completed Form ST3, Certificate of Exemption.

Note:  If your employee purchases taxable items that you later reimburse them for, the items are taxable even if they would be exempt if the nonprofit organization purchased the items directly.

Items That Do Not Qualify for Exemption

The Nonprofit Exempt Status does not apply to purchases of:

• Prepared food, candy, soft drinks, alcoholic beverages, and catered food
• Lodging
• Gambling equipment and supplies
• Most motor vehicle purchases, leases, and rentals (including the 9.2% car rental tax and 5% rental fee)
• Waste collection and disposal services

Do not pay sales tax on items that are sold for fundraising. Give your vendor a completed Form ST3, Certificate of Exemption. Specify the Resale exemption. Examples include:

• Alcoholic beverages
• Arts and crafts
• Books
• Prepared food
• Soft drinks

If you sell alcoholic beverages at a fundraising event, you must do the following:

• Contact the city office where the fundraising event is located for a temporary retail liquor license
• Purchase your liquor from a licensed liquor distributor

Qualifying health care facilities may be eligible for a sales tax exemption on certain purchases. Examples include:

• Boarding care homes
• Clinics
• Critical access dental providers
• Hospitals
• Nursing homes
• Outpatient surgical centers
   

For more information, see Health Care Facilities.

Veteran organizations do not qualify for Nonprofit Exempt Status. However, these organizations do qualify for a limited exemption if both of the following apply:

• The organization is organized in Minnesota
• The organization is exempt from federal tax under section 501(c)(19) of the Internal Revenue Code

The exemption applies to purchases for charitable, civic, educational, or nonprofit use. Examples include:

• Educational brochures and posters
• Equipment for youth sports teams
• Flags
• Items given away though programs like Operation Comfort Warriors
   

To claim the exemption, give your vendor a completed Form ST3, Certificate of Exemption. Specify the Veteran organization exemption.

Not all purchases for a nonprofit organization are exempt from sales tax. Some examples of taxable purchases are listed below.

Taxable Services

Several services are taxable. Examples include:

• Building Cleaning and Maintenance
• Detective and Security Services
• Laundry and Cleaning Services
• Lawn and Garden Maintenance
   

For more information, see Taxable Services.

Use Tax