Athletic Facilities, Recreational Areas, Resorts and Campgrounds 123

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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: salesuse.tax@state.mn.us
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.
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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
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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
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Minnesota Revenue, Athletic Facilities . . .