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Sales Tax on University of Minnesota Purchases of Catering Services

 

Most purchases made by the University of Minnesota (the U) are exempt from sales tax in accordance with a broad statutory exemption. However, because prepared food, candy, alcohol, and soft drinks are excluded from the exemption, they are subject to tax when purchased by the U. The U regularly purchases these taxable items, as well as other items and services, from caterers.

At our request, the Minnesota Department of Revenue has provided guidance relating to the taxability of purchases by the U. Our opinion request and the response from the DOR are available here. The following is based on that guidance and applies when the U pays directly for the purchases. Contact the University Tax Management Office with questions.

Taxable Purchases From Caterers

  • Food, including meals, buffets, snacks, hors d’oeuvres, appetizers, desserts, and any other item meeting the statutory definition or prepared food
  • Alcoholic beverages taxable as of 7/1/09 (pdf)
  • Nonalcoholic beverages, including soft drinks or other drinks that meet the statutory definition of prepared food
  • Services related to preparing food or soft drinks
  • Bar minimum fees

Inform your caterer that charges for exempt items should be listed separately from taxable items on an invoice to minimize the sales tax due. If taxable items are combined as one line item with exempt items, the entire charge is taxable; work with your caterer to ensure that exempt items are billed as separate line items from taxable items. Local taxes in the jurisdiction where the event is held should be imposed on taxable items. Charges for alcoholic beverages are subject to tax as of July 1, 2009, so the Downtown Minneapolis Liquor Tax will also apply to charges for alcoholic beverages in the downtown district.

Additional Catering Links

 

 

About the Tax Management Office

Leadership

Kelly Farmer

Director


Parent Unit

University Finance

Financial Units Org Chart (pdf)

 

Department Contact Information

University Tax Management

2221 University Ave SE, Suite 100

Minneapolis, MN 55414

P: 612-624-1053, F: 612-626-1886

taxhelp@umn.edu

Directions & Parking Information


Tax Managment Staff

TMO Organizational Chart (pdf)