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Minnesota clarifies taxability of room rentals, athletic club memberships, and sky boxes


 Admissions to athletic clubs is sometimes taxable in Minnesota, and sometimes exempt.

The Minnesota Department of Revenue has clarified the taxability of room rentals located within a place of amusement, athletic event, or recreational area; athletic and sports facility club memberships; and the lease of sky boxes.

Room rentals

Places of amusement and recreational areas that rent rooms to the general public must apply tax to room rental charges if the guest obtains the right to use the recreational or amusement facilities. For example, if a group rents a conference room at a golf course and is permitted use of the golf course while there, the charge for the conference room is subject to tax.

However, if the rental of a room does not permit use of the amusement or recreational facilities, the rental charge is exempt. If, in the above example, the group that rents the room must pay an additional fee to access the golf course, the charge for the room is exempt. Department of Revenue Notice 17-07 has additional information.

Sports and athletic facility memberships

Generally, the sale of one-time initiation fees, periodic dues, and memberships to sports and athletic facilities are subject to Minnesota sales tax, provided:

  • The sports and athletic facilities are available to the members (whether a separate charge applies or not); and
  • The sports and athletic facilities are not equally available to the general public.

Sports and athletic facilities include, but aren’t limited to: basketball facilities; exercise equipment; handball, racquetball, squash, tennis, and volleyball courts; running tracks; and swimming pools.

Social memberships

Although memberships that permit use of sports and athletic facilities are taxable, social club memberships that don’t permit use of athletic or sports facilities are exempt.

In addition, capital surcharges and special assessments charged on top of one-time initiation fees or memberships are generally exempt. Ordinarily, these fund specific capital improvements, stock purchase payments, or similar items unrelated to use of the athletic or sports facilities. See Revenue Notice 17-07 for more details.

Sweet suite

As of July 1, 2017, admission for the use of a private box seat, skybox, or suite is exempt when:

  • “The lessee may use the private suite, private skybox, or private box seat by mutual arrangement with the lessor on days when there is no amusement or athletic event; and
  • The sales price for the privilege of admission is separately stated and is equal to or greater than the highest priced general admission ticket for the closest seat not in the private suite, private skybox or private box seat.”

Additional information is available from the Minnesota Department of Revenue.

Changes in product taxability can complicate sales and use tax compliance for affected businesses. Tax automation software helps simplify it.


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.