www.revenue.state.mn.us Athletic Facilities, Recreational Areas, Resorts and Campgrounds 123 Sales Tax Fact Sheet What’s New in 2014 Starting July 1, 2014, retailers may buy coin-operated entertainment and amusement devices exempt from sales tax. For details, see “Purchases” on page 3. Admissions Admissions to recreational areas, including those owned and operated by state, county and local governments, are subject to sales tax. These admissions include fees for yearly stickers, short-term passes, guest fees, and league fees. Recreational areas include, but are not limited to: • amusement parks • miniature golf courses • archery ranges • parks • athletic fields • picnic grounds • bocce ball courts • playgrounds • campgrounds • pools • community centers with • resorts athletic or recreational • roller blade parks facilities • roller skating rinks • curling club rinks • shooting ranges • dart board games • shuffleboard courts • fairgrounds • skateboard rinks • game farms • ski areas • golf courses • state or county parks • golf driving ranges • swimming beaches • gymnasiums • tennis courts • horse riding facilities • trails • horseshoe courts • volleyball courts • hunting preserves • ice skating rinks Membership fees Memberships to any club, community center, or other organization that provides sports or athletic facilities for members are taxable. One-time membership fees and periodic membership dues are taxable, as well as initiation fees and social memberships that allow admission to the club but no use of athletic facilities. One-time initiation fees are nonrefundable payments required as a precondition to membership in the club. Periodic membership dues are payments due at least annually to Sales and Use Tax Division – Mail Station 6330 – St. Paul, MN 55146-6330 Phone: 651-296-6181 or 1-800-657-3777 Minnesota Relay (TTY) 711 Email: [email protected] Stock No. 2800123, Revised 7/14 retain the rights and privileges of club membership. Mandatory annual charges that allow members to make club purchases at special membership rates are taxable as periodic membership dues. However, charges or penalties assessed for not meeting minimum spending requirements are not taxable if separately stated from taxable charges. See Revenue Notice 00-05, Golf, Country Club, and Athletic Club Memberships, for more information. Use tax. When you buy business equipment and supplies, such as cash registers, furniture, bathroom supplies, etc., you must pay sales or use tax. Sales tax is generally charged by the seller at the time of sale. However, if the seller does not charge Minnesota sales tax, you must pay use tax. Use tax is due on your cost of the item. See the Purchases section on page three for more information on what purchases may be subject to use tax. Also see Fact Sheet 146, Use Tax for Businesses, for more information. If a membership is sold where a local sales tax applies, the local tax must be charged even if the customer may use facilities located in another area. See Local sales and use taxes on page 3. See Fact Sheet 124, Exercise Facilities and Health Clubs, for more information. Memberships at YMCA, YWCA, and Jewish Community Centers (JCC’s) of Greater Minneapolis and St. Paul are not taxable, including one-time initiation fees and periodic membership dues. However, separate charges for access to and use of the organization’s sports and athletic facilities are taxable. For example, swimming pool admissions, racquetball and tennis court charges are taxable. Entry fees to competitive events Entry fees are payments required as a condition to participate in a competitive event. Entry fees are generally taxable, because they are for use of a golf course, athletic field, or other athletic facility. The entire fee is taxable, including any amounts that go toward prize or trophy funds. Entry fees for events that do not involve athletic facilities or recreational areas are not taxable. For example, an entry fee for a marathon that will be run on city streets is not taxable. A special exemption exists for admissions to certain golf tournaments held in Minnesota. They are exempt if the beneficiary of the tournament’s net proceeds qualify as a This fact sheet is intended to help you become more familiar with Minnesota tax laws and your rights and responsibilities under the laws. Nothing in this fact sheet supersedes, alters, or otherwise changes any provisions of the tax law, administrative rules, court decisions, or revenue notices. Alternative formats available upon request. Minnesota Revenue, Athletic Facilities . . . Game farms tax exempt organization under section 501(c)(3) of the Internal Revenue Code. Admission or membership fees charged by game farms, shooting preserves, and hunting clubs are taxable. Facility rental Game release charges are part of the taxable admission or membership fee. However, up to 75 percent of the amount billed as game release charges may be exempt from sales tax as the sale of an exempt food item if the birds or animals are intended for human consumption. To be exempt, the portion of the charge allocated to the sale of food must be stated separately from game release charges on the invoice to the customer; if the charge is not separately stated, the entire game release charge is taxable. Athletic fields or facilities rented by a team or league on a per time basis or for a whole season are taxable. Rentals of buildings, rooms, chapels, gazebos, pavilions, picnic shelters and other similar structures for weddings, meetings, reunions, parties, etc. are subject to tax if they are located within a recreational area such as those listed on page one. Fees for storing golf carts are not taxable. Lessons Charges for lessons are not taxable. Sometimes the charge for lessons includes the use of an athletic facility that would normally be taxable. If the charge for the athletic facility is separately stated, that portion is taxable. If the charge for lessons is one charge that includes both the instruction and the use of the facility, the charge is not taxable, unless the charge for the use of the facility is a significant part of the total cost of the lessons. Game release charges include, but are not limited to, • charges to have a certain number of birds or animals available to hunt, • charges to have birds or animals released prior to hunting, or • charges for birds or animals taken over the limit allowed in the base charge for admission or membership. Lodging and seasonal rental contracts Game farms, shooting preserves, and hunting clubs must pay sales tax on items that they use or consume in their business except for live birds or animals; feeds, medicines and drugs; and other consumable materials and supplies used in raising and maintaining the live birds or animals. Charges to lease or rent lodging facilities or campsites for periods of less than 30 days are taxable. Lodging or site rentals are not taxable if: • the rental period is 30 days or more, and • there is an enforceable written agreement requiring either the lessee or lessor to give notice before terminating the agreement. Retail sales of slaughtered, dressed and wrapped birds, or animals by game farms, shooting preserves, or hunting clubs are not taxable. Lodging facilities include cabins, motels, lodges, condos, and trailers. Camp fees Camp fees are amounts paid to attend a camp, including charges for meals and lodging, and for instruction or training. Camp fees are exempt if they are for: • services primarily for children, adults accompanying children, or persons with disabilities; or • educational or religious activities; and the camp or facility is owned and operated by a 501(c)(3) organization. Site rentals include campsites, or sites to park campers, motor homes, trailers, or mobile homes. Ski areas Admissions to ski areas are taxable; however, cross country ski passes for using public trails are not taxable. Items used or consumed primarily and directly for tramways at ski areas or in snowmaking and snow grooming at ski hills, ski slopes, or ski trails are exempt. This includes machinery, equipment, fuel, electricity, and water additives used to produce and maintain machine-made snow. The exemption extends to purchases of repair and replacement parts for qualifying equipment and applies to purchases by owners and contractors for use at ski areas. To claim exemption, give your supplier a fully completed Form ST3, Certificate of Exemption, using Exemption Code I and writing in “ski areas”. Educational or religious activities include, but are not limited to, events such as marriage retreats, adult religious camps, music camps, culture camps, or language camps. They do not include events such as quilting bees; family or class reunions; or wedding receptions. Before July 1, 2003, the exemption applied only to camps that provided educational and social activities for young people primarily age 18 and under. 2 Minnesota Revenue, Athletic Facilities . . . Sales Sales to nonprofit organizations. Qualifying nonprofit organizations must give you a fully completed exemption certificate to make purchases without paying tax. The nonprofit exemption applies to admissions and tangible goods. It does not apply to meals and lodging. Examples are listed below to help you determine if items you sell are taxable. Examples of taxable sales: • bait and tackle • parking fees • batteries • pet food • beer • pop • bucket of golf balls (rent• postcards ed at driving range) • rental of boats, motors, • bug spray life jackets, bikes, canoes, • camping fees, including skis, telescopes, picnic electric or water hooktables and other equipups ment • candy and gum • skate rental • charcoal and lighter fluid • souvenirs, except cloth• tobacco, except cigarettes ing • clothes line and pins • sunglasses (nonprescrip• firewood (recreational tion) use) • swimming goggles, nose • first aid supplies clips, and ear plugs • food for zoo animals • tablecloths • food, meals or drinks • tennis rackets and balls prepared or heated by the • towel service seller • vending machine receipts • fuels for stoves and lanand jukebox, pool table terns and electronic game re• golf clubs, balls, gloves ceipts. See Fact Sheet and spiked or cleated 158, Vending Machines, shoes for more information. • jewelry • water toys • latrine chemicals • life vests Examples of nontaxable sales: • boat launching and slip • rental fees • bowling shoes • bottled water (unsweetened) • caps, t-shirts and other clothing • cigarettes • fishing and hunting li• censes • food products such as milk, bread, canned goods, meat and cereal • ice • • ice fish house storage fees • over-the-counter drugs. Equipment sales. If you sell or lease equipment or other items that you used in your business, the sale or lease may be subject to sales tax. See Fact Sheet 132, Occasional Sales of Business Equipment and Goods, for more information. Purchases You must pay sales tax when you buy items that you use to provide services to your customers. Furniture to provide lodging accommodations, and equipment and supplies provided to customers along with admissions or use of recreational or athletic facilities are taxable. Use tax. If the seller doesn’t charge sales tax, you must report the use tax directly to the Department of Revenue when you electronically file your sales and use tax return. See Fact Sheet 146, Use Tax for Businesses, for more information. Coin-operated entertainment and amusement devices Starting July 1, 2014, retailers may buy these devices exempt from tax if they sell admissions to or use of amusement devices. Examples of coin-operated entertainment and amusement devices include fortune-telling machines, pool tables, batting cages, and jukeboxes. Vending machines, lottery devices, or gaming devices do not qualify for this exemption. For more information see, Minnesota Statutes 297A.61, subd. 3(g)(1). prepackaged chips, nuts, beef jerky, pies and cupcakes. However, these items are taxable when sold in a vending machine, bar, restaurant or other eating establishment. prepackaged sandwiches, burritos, pizza, etc. sold directly from the cooler, unless prepared or heated by the retailer self-service coin operated washers, dryers, and showers Examples of taxable purchases include: • appliances, equipment, • laundry and cleaning serand supplies used to provices including cleaning vide lodging accommodaof linens, uniforms, towtions such as beds, TV els, rugs, or mats sets, furniture, dishes, • lawn care services kitchen appliances, irons, • maintenance materials and towels, and bathroom equipment used for resupplies pairs, such as paint and • equipment or items your brushes, lumber, nails, fercustomers use as part of tilizer, grass seed and tools the rental lodging accom- • office supplies and modations that are includequipment including ed in the lodging charges, computers and computer such as boats, motors, and software fishing equipment • recreation and sports • building cleaning and equipment such as ping maintenance services inpong, golf, range balls, cluding carpet, drapery mini golf equipment, bats and upholstery cleaning and balls, horseshoe and • chemicals and detergents volleyball equipment, cafor cleaning equipment, noes, and water bikes 3 Minnesota Revenue, Athletic Facilities . . . • • buildings, and vehicles cleaning equipment such as vacuum cleaners, mops, brooms, pails, carpet shampooers, washers, and dryers furniture • • • • • • • • Local sales and use taxes repair parts score cards and pencils security services specialty advertising materials, such as mugs, pens, and other giveaway items targets and clay pigeons telephone services training materials and supplies utilities for space heating, cooling and lighting If you are located in an area with a local tax, local sales or use tax may also be due. Local taxes are listed and explained in detail in Fact Sheet 164, Local Sales and Use Taxes. Legal References Minnesota Statutes 297A.61: subd. 3(g)(1), Admissions subd. 3(g)(2), Lodging subd. 3(g)(4), Memberships subd. 4(h) & (j), Retail sale Minnesota Statutes 297A.68, subd. 3a, Coin-operated entertainment and amusement devices Minnesota Statutes 297A.70, Subd. 16, Camp fees Revenue Notice 94-09, Revenue Notice 97-12, Leased Seasonal Sites in Recreational Areas Revenue Notice 00-05, Golf, Country Club, and Athletic Club Memberships Revenue Notice 02-13, Game Farms, Shooting Preserves and Hunting Clubs – Game Release Charges Revenue Notice 02-20, Technical Corrections of Prior Revenue Notices Revenue Notice 04-03, Camp Fees Resale exemption Items that are purchased for resale or to be held exclusively for lease or rental to the customer may be purchased exempt from tax. Give your supplier a Certificate of Exemption, Form ST3, and use Exemption Code G, Resale, to claim exemption. Examples include: pop, candy, insect repellent, and other items sold over the counter. Equipment such as boats, motors, golf, ski, and volleyball equipment can also be purchased exempt for resale if the equipment is offered for rent to customers separate from other taxable charges. For example, weekly cabin rentals include the use of a boat and motor. Paddle boats and pontoons are available to rent for a separate charge. You may purchase the paddle boats and pontoons exempt for resale, but you must pay sales tax on purchases of the boats and motors included in the cabin rental price. Other Fact Sheets 102A, Food and Food Ingredients 102B, Candy 102C, Soft Drinks and Other Beverages 102D, Prepared Food 117A, Drugs, Grooming and Hygiene Products 137, Restaurants and Bars 141, Hotels and Lodging Facilities 142, Sales to Governments 4 Minnesota Revenue, Athletic Facilities . . .