Most sales of food and beverages to governments are taxable. However, there are some situations where sales tax is not due.
|Food Sales Taxability
- Prepared food and drink are not taxable when billed and paid for by the federal government and its agencies.
- Prepared food and drinks may not be taxable when sold to foreign consular officials, depending on the type of exemption card used and what is purchased. See Government – Federal and Foreign Diplomats.
|State and Local Governments
- Prepared food and drinks are taxable when sold to state and local government agencies.
- Local governments do not pay local sales taxes but must pay special local taxes (lodging, restaurant, entertainment, liquor).
- Prepared food and drinks are not taxable when sold to tribal governments, no matter where the food and drink are consumed. This does not apply to the Prairie Island Mdewakanton Community. See Tribal Governments and Members.
- Prepared food and drinks are taxable when sold to nonprofit organizations. The nonprofit exemption does not apply.
- A nonprofit organization may purchase food and drink from a distributor for resale. The organization must provide you with a completed Form ST3, Certificate of Exemption.
- You cannot sell alcoholic beverages to a nonprofit organization for resale. Only liquor distributors are allowed to sell liquor for resale.
|Direct Pay Authorization
- Prepared food and drinks are taxable when sold to businesses with Direct Pay authorization. The direct pay exemption does not apply.