Understanding Nontaxable Purchases for Prepared Food and Drinks in Minnesota

Understanding which items are exempt from sales tax can help businesses streamline their operations and comply with Minnesota tax regulations. Let’s delve into the details and guidelines provided by the Minnesota Department of Revenue.

Nontaxable Purchases:

As a business selling prepared food and drinks, you have the opportunity to buy certain items exempt from sales tax if they will be sold as part of the prepared food and drinks. To qualify for this exemption, you need to provide your supplier with a completed Form ST3, Certificate of Exemption, specifically indicating the Resale exemption.

The following table provides examples of nontaxable purchases for businesses selling prepared food and drinks:

NONTAXABLE PURCHASES	EXAMPLES
Items that are part of prepared food	Deli paper, foil, and wraps used to package take-out food Doggie bags and boxes Pie tins (when sold with a pie) Take-out food containers
Disposable serving pieces	Chopsticks Cups and lids Napkins Placemats Plates and utensils Tablecloths
Other supplies	Straws Swizzle sticks Toothpicks
Clothing for general use	Aprons Gloves Uniforms

By purchasing these items exempt from sales tax, businesses can save on costs and enhance their efficiency in providing prepared food and drinks to customers.

It’s important to note that the nontaxable exemption specifically applies to items that will be sold as part of the prepared food and drinks. Items used for other purposes, such as general office supplies or non-food-related operations, may not qualify for this exemption and may be subject to sales tax.

For more detailed and specific information, we recommend referring to the official resources and guidelines provided by the Minnesota Department of RevenueNontaxable Purchases | Minnesota Department of Revenue (state.mn.us).

Get in touch with Prudent Accountants and stay informed and compliant with tax regulations to ensure accurate reporting and a smooth business operation.