General MN Sales Tax Guidance for Colleges and Universities

NOTE:  The following is general MN sales tax guidance regarding the collection of sales tax for common items found on campuses that was compiled by the Minnesota State Colleges & Universities, and updated by St. Olaf College.  There are exceptions, so please contact the Business Office with specific facts and circumstances or with any questions.  Please note that other tax exempt entities are entitled to certain exemptions from colleges and universities collecting sales tax from them (obtain & retain Form ST3s).
T = subject to MN sales tax (generally)
N = not subject to MN sales tax (generally)
Taxable/Nontaxable                          Description
Education
N
Tuition (courses/seminars/customized training) and all related instructional fees
N
Camp Fees – Educational activities
Facilities & Equipment (including parking)
N
Facility rentals – meeting room or classroom (equipment not a material part of the rental)
N
Charge for audio/visual labor service charge relating to room rental
N
Charge for janitorial services (relating to facility rentals) included in room rental fee
T
Separately stated charge for janitorial services
T
Facility rentals where equipment is a material and more than incidental part of room rental – equipment portion is taxable (Example: computer room with computer equipment)
Possibly not
Rental of equipment and meeting room with an operator provided as part of the rental. Please call Tax Services with specific facts and circumstances.
T
Dorm room – lodging (less than 30 days)  Example: Rent empty dorm rooms to public on a nightly basis during summer.  Except where lodging is included in the charge for an educational program sponsored by the school.
N
Dorm room – lodging (30 days or more and lease agreement)
N
Equipment rentals included with a facility rental that are immaterial to the rental of the room. Nontaxable example: An overhead projector and/or computer (not material to the room rental) comes included in the price of the room rental.
T
Equipment rentals (separately billed)
Example: Separate bill for the overhead projector and/or computer (not included with room rental).
T
Rental of game, athletic, and recreational equipment
Examples: boats, paddle boats, canoes, bikes, etc.
T
Open bowling or billiards (for recreation not for a class)
T
Video games/table tennis/foosball/pinball/jukeboxes and other electronic game receipts
T
Nonresidential Parking: Fees paid by businesses or individuals who do not live on campus, for parking lots or ramps, whether paid for on a contract or per-use basis
T
Prepaid Parking Cards – if card is strictly for nonresidential parking, collect tax on sale of card (rather than on the use)
N
Parking Meters
N
Parking Fines
N
Fee charged for a bicycle parking space
N
Personal computers and related computer software sold or leased by a college or university to students who are enrolled at the institutions are exempt if: the computer/software is prescribed in conjunction with a course of study and each student of the institution or of a unit of the institution in which the student is enrolled, is required by the institution to have such a personal computer and related software as a condition of enrollment
T
Computer sales to students/staff/public for personal use
N
Surplus property (used equipment) sales (isolated & occasional sales)(exception: see vehicle sales)
T
Surplus property (used equipment) sales by the college or university on a regular basis
T
Vehicle sales are subject to MN sales tax (Note: even sales to tax exempt entities)
Bookstore
N
Textbooks and instructional material required for use in a course of study and sold to regularly enrolled students are not subject to sales tax
T
Books (other than textbooks), encyclopedias, dictionaries, and yearbooks
T
Supplies such as pens, pencils, paper, folders, etc.
N
Sale of Gift Certificates
Depends
Gift Certificate Redemption. Gift certificates are treated the same as cash, so look to the item purchased to determine if taxable.
N
Clothing
Depends
Debit Cards – Taxable/Nontaxable depends on use of card (or item purchased). Institution needs to wait until cards are used to determine if sales tax should be collected.
Athletic & Artistic Performances
T
Skybox (athletic event)
T
Athletic Ticket Sales (regular season & tournament) – College/University athletics
N
Artistic Performances (theater, concerts, etc.) NONTAXABLE EFFECTIVE AUGUST 1, 2005
N
Tickets or admissions to regular season “school” (for example, high school) games, events, and activities, and games, events, and activities sponsored by the Minnesota State High School League. NONTAXABLE EFFECTIVE FOR SALES AFTER JUNE 30, 2006 and BEFORE JULY 1, 2011. See H.F. No. 2480.  College/University ticket sales still taxable – see above.
T
Movie Ticket Sales
Exercise Facilities and Health Clubs
T
Fees or charges
T
Memberships
T
Swimming pool admissions, racquetball and tennis court charges
N
Aerobic, exercise, or other class fees (when separately stated)
T
Towel service
N
Day Care
T
Fee for rental of basketball court
T
Fee for admission to swimming pool
T
Fee for public use of walking track
T
Fee for use of fitness center
T
Fee for ice arena time
Meals, Food, Vending Machines and related items
T
Concession food sales (regular season & tournaments): follow taxable/nontaxable food sale rules
T
Candy, soft drinks, and prepared foods
T
Candy is taxable.  Candy does not include any preparation containing flour or one which requires refrigeration.
N
Examples of items that contain flour that are not taxable include Kit Kats, Twix, and licorice.
N
Examples of items that require refrigeration and are not taxable include popsicles and ice cream bars.
N
Bottled or canned water that does not contain sweeteners
N
Milk and drinks that contain milk
N
Fruit or vegetable juices that contain more than 50% juice by volume
T
Vending machine sales of all food and beverages – Vending Machine Operator
N
Vending commissions received from the vending machine operator
T
Meals, in general
N
Meals provided under a board contract (If contract is between student and College or University)
T
Culinary Arts Dining Programs (lunches, dinners, and other sales of the prepared food)
Tips and service charges
N
Tips left (or added to credit card) voluntarily by a customer
T
However, tips or service charges added to the bill by the seller is taxable.
T
Catering – The entire charge for prepared food and drinks is taxable, including charges for food, preparation, service, and delivery
N
Coat check
T
Cover charges and minimum charges that allow the customer to receive food, drinks, entertainment, dancing, admission, etc., are taxable
Miscellaneous
T
Copying (including coin-operated machine receipts) or printing services (students, public, businesses)
N
Copying or printing services charged to internal departments or other tax exempt entities
N
Locker rental (built-in lockers)
T
Locker rental (free standing or bolted to floor)
N
Transcript Fees
N
Graduation cap and gown rental
N
Day care
T
Art Department – sale of works of art (paintings, pottery, photography etc.)
N
Nursing or Dental Services (However, see MinnesotaCare Tax)
N
Nurses’ caps and uniforms
N
Prescription Drugs (However, see MinnesotaCare Tax)
N
Over-the-counter drugs are usually exempt (vitamins and minerals are taxable) – see Fact Sheet 117 for exceptions
N
Prosthetic Devices
N
Construct a home on site on a foundation (and sell the home)
T
Construct a freestanding home (and then sell the home) – “Freestanding” means the item is held in place only by the force of gravity and not constrained  from moving.  Example: Construct a home on campus and then home is sold and moved onto a foundation.  Note: Materials for building a home (either on site or freestanding) as part of educational program should be purchased exempt from sales tax by colleges/universities (use exemption certificate ST3). Contact Tax Services regarding a potential refund if you have incorrectly paid tax on material purchases.
N
Build a fireplace on site (for example, in a home) and receive payment for the fireplace
T
Build a freestanding (i.e. able to move to site) fireplace and then sell the fireplace. Note: Materials for constructing fireplace (either on site or freestanding) as part of educational program should be purchased exempt from sales tax by colleges/universities (use exemption certificate ST3)
Automotive Repairs and Services
T
Parts – Separately stated charges for repair or replacement parts
T
Oil Changes – Retail sales of oil and filters are taxable.
N
The labor to change oil in a vehicle is not taxable if separately stated on the invoice.
T
If there is one charge for labor and oil, the entire amount is taxable.
T Vehicle painting – If you state the pain, sealant, and labor charges separately on your customer’s invoice, charge the customer tax only on the paint and/or sealant.
N
Waste disposal fees (if separately stated)
Depends Labor – contact Tax Services with specific questions
N
Repair Labor – Nontaxable if separately stated. Repair labor is restoring an item to its original condition so it can be used for its original purpose.
T
Installation Labor – Defined as setting an item into position or connecting or adjusting or programming it for use.
T
Fabrication Labor – Defined as making, creating, or assembling a product or altering an existing product into a new or changed product.
Cosmetology
N
Haircuts & styles/pedicures/manicures
T
Hair care products sold
Flower Shops
T
Flowers/plants/flower arrangements
T
Pots/vases/containers
Library  
N
Library late fees or penalties on general circulation items
T
Rental fees for books, films (and late charges on these items)
T
Sale of used books
T
Photocopies
Massage Therapy (see Minnesota Dept of Revenue Fact Sheet #162)
T
Massages (see MinnesotaCare Tax if prescribed by physician)