The Minnesota Department of Revenue has amended its rules on food, drinks, and meals; sales to exempt entities; and charitable, religious, and educational organizations. These amendments are temporary and will expire in November 2011.
The rule for food, drinks, and meals will now apply to prepared food, candy, and soft drinks. In addition, retailers of prepared food, candy, or soft drinks, including but not limited to restaurants and fast food establishments, must pay the tax on all purchases of equipment and products used or consumed in the business, including fixtures and reusable items such as linens, flatware, glassware, and towels. References to “meal and lunches” were changed to “prepared food, candy, and soft drinks” and the definition of “meals and lunches” was removed.
The rule on meals, admissions and lodging to exempt entities was changed to prepared food, candy, or soft drinks, or the furnishing of lodging to governmental entity, hospital, surgical center, or nonprofit organization. Under this rule, no sales and use tax exemption is allowed for meals, admissions, prepared food, candy, or soft drinks purchased by, or lodging furnished to, governmental entities, hospitals and surgical centers, or nonprofit organizations even if the entity is billed directly and pays directly for such services. This exclusion does not apply to the federal government, its agencies, and instrumentalities that purchase meals and prepared food, candy, soft drinks, or lodging directly.
(Minnesota State Register, Vol. 34, No. 20; Rules 8130.4700, 8130.5700, and 8130.6200, Minnesota Department of Revenue, effective as noted)