Minnesota: Fundraising Sales Tax Flow Chart
- Sales Tax News
- Nov 10, 2015 | Gail Cole
Ah, flow charts. Who doesn’t love them? If you don’t find all the arrows and clumps of text confusing, they can convey some pretty good information. And so the Minnesota Department of Revenue has created a flow chart entitled, Do I need to charge sales tax on my fundraising sales?
So, do I?
Youth and senior groups
In a nutshell, nonprofit youth and senior citizen groups whose annual gross receipts from fundraising events in Minnesota do not exceed $20,000 should not charge sales tax on those sales. They should charge sales tax on any fundraising sales in excess of the first $20,000.
Sales tax is not charged on fundraising events hosted by other nonprofit organizations (such as charitable, educational, religious), provided all of the following requirements are met:
- No net earnings benefit a private individual
- All proceeds are used for charitable, religious, or educational purposes
- Separate accounting records are maintained for each fundraising event
- The host of the event is not an active or passive agent of a for-profit organization or person
- The event is not held on premises that are leased or occupied for 6-29 days
- The fundraising organization bears financial risk for the event
- Net revenue for the event equals or exceeds the state and local taxes
- The event has no bingo or gambling activities
- Qualifying fundraising events do not exceed 24 days per year
- Gross receipts from fundraising does not exceed $20,000.
Otherwise, sales tax must be charged on fundraising sales.
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