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Minnesota Changes the Taxation of School Fundraising Sales

  • Mar 6, 2015 | Gail Cole

 Exempt when sold at school fundraising events in Minnesota. Because candy is so good for children?

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)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.