A change to how Minnesota sales tax applies to school fundraising annual gross receipts took effect on January 1, 2015.
The Minnesota Department of Revenue revised Sales Tax Fact Sheet 111 clarifies that while sales tax generally “applies to taxable items because the exemption for school purchases does not apply to sales made by a school, … there are fundraising exemptions that may apply.”
Beginning January 1, 2015:
- For youth and senior groups, “the first $20,000 of fundraising sales are exempt from sales tax.” Previously, the first $10,000 of fundraising sales was exempt.
- For all nonprofit organizations, “Sales from up to 24 days of fundraising events each year are exempt from sales tax.” Forthcoming Fact Sheet 180 will provide additional information.
The candy incentive
It should be noted that a special exemption applies to school fundraising sales of candy and gum.
When other sales receipts (non-candy, non-gum) “must be deposited with the district treasurer, the criteria of the fundraising exemption do not apply … [and sales tax] must be collected on sales of taxable items.” According to the department notice, sales of candy and gum “are exempt even when the receipts are deposited with the district treasurer.”
Fact sheet 111 gives further examples of how sales tax does, and doesn’t, apply to sales made by schools and school fundraising sales.
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photo credit: Reese's Sticks for Halloween via photopin (license)
