Minnesota sales tax applies to the sale of soft drinks. The food product exemption does not apply to soft drinks.
Soft Drinks
Soft drinks are nonalcoholic beverages that contain natural or artificial sweeteners.
“Natural and artificial sweeteners” means an ingredient of a food product that adds a sugary sweetness to the taste of the food product.
For sales tax purposes, beverage powders and concentrates are not considered soft drinks.
To determine if a beverage is a taxable soft drink, you must review the product label. The following table provides more information.
If the product label includes *
|
The drink is
|
Examples
|
- Agave
- Aspartame
- Barley malt
- Corn syrup
- Dextrose
- Evaporated cane juice
- Fructose
- Fruit juice concentrate
- Honey
- Invert sugar
- Maltitol
- olasses
- Rice syrup
- Saccharin
- Stevia
- Sucralose
- Sucrose
- Other artificial or natural sweeteners
|
Taxable |
- Bottled or canned water that contains sweeteners
- Coffee and tea drinks that contain sweeteners
- Fruit ades, drinks, or nectars that contain sweeteners and have 50% or less fruit juice or no fruit juice percent shown on label
- Kombucha tea
- Nonalcoholic beer or near beer (contains barley malt)
- Oral electrolyte drinks
- Sports drinks
- Soda pop
- Sparkling grape juice containing sweeteners and 50% or less fruit juice
|
- Milk or milk products
- Soy, rice, or similar milk substitutes
- More than 50% vegetable or fruit juice by volume, even if they contain sweeteners
- No specific sweetener listed but lists natural flavor, essence, or spice
|
Not taxable
(for exceptions,
see Additional
Information) |
- Apple cider
- Beverage powders or concentrates
- Bottled or canned water with no sweeteners
- Coffee beans or grounds and tea leaves
- Nutritional drinks that contain milk or milk substitutes
- Milk and drinks that contain milk
|
Note: This list is for reference only. It does not include all natural and artificial sweeteners or beverages.
Bottled Water
If no sweeteners are added, carbonated, non-carbonated, or flavored bottled water are generally not taxable (regardless of size).
Delivery charges for nontaxable water are also exempt.
However, bottled water is taxable when the seller provides straws or other eating utensils. For more information, see Prepared Food Fact Sheet.
Alcoholic Beverages
Alcoholic beverages are taxable. Alcoholic beverages contain 0.5% or more alcohol by volume.
Beer, wine, and liquor sold by a business with an intoxicating liquor license are subject to the general sales tax rate, liquor gross receipts tax, and any local taxes that apply. For more information, see the Eating Establishments Guide.
Nonalcoholic Beer
Nonalcoholic beer is a taxable soft drink because it contains sweeteners. These beverages are subject to the general sales tax rate and any applicable local taxes.
Additional Information
Any beverage listed as exempt in this fact sheet becomes taxable when it is served in a glass, cup, or pitcher. For more information, see the Eating Establishments Guide.
Cannabinoid Products
Currently, edible cannabinoid products and nonintoxicating topical products are legal to sell in Minnesota.
Starting July 1, 2023, edible cannabinoid products are subject to the 10% Cannabis Tax. In addition to the Cannabis Tax, taxable cannabis products are subject to both:
- 6.875% state general rate sales tax
- Any applicable local sales taxes based on where the transaction takes place
Nonintoxicating topical products are not subject to the 10% Cannabis Tax, but are subject to both:
- 6.875% state general rate sales tax
- Any applicable local sales taxes based on where the transaction takes place
For more information, go to our website www.revenue.state.mn.us and type Cannabis Tax into the Search box
Ice
Ice cubes, crushed ice, and ice blocks are not taxable. Dry ice is taxable.
Vending Machines
The only taxable food sold through vending machines is prepared food, soft drinks, candy, and dietary supplements. For more detailed and specific information on Soft Drinks and Other Beverages , you can visit at Soft Drinks and Other Beverages – Minnesota Department of Revenue
