MN has doubled the tax exemption for youth sports groups and other nonprofits

It’s summertime, and many youth sports groups are in full swing. Good news for these groups, and other nonprofit organizations, is that the state of Minnesota has doubled their sales tax exemption this year.


Youth soccer league
(Image: Wikimedia Commons)

As of January 1, 2015, the annual fundraising exemption for qualifying youth and senior citizen nonprofit groups increased to $20,000 from the previous limit of $10,000. This exemption, along with some clarification of state tax laws for nonprofits, is outlined in a fact sheet released from the Minnesota Department of Revenue in June 2015.

State law provides a sales tax exemption for certain nonprofit organizations that receive formal authorization from the state. To receive authorization, eligible nonprofit organizations must apply for the exemption by completing Form ST16, “Application for Nonprofit Exempt Status – Sales Tax.” Qualifying for the federal income tax exemption does not automatically exempt a nonprofit organization from paying MN sales taxes.

This exemption applies to purchases made by the organization. It does not allow the nonprofit to sell items without collecting sales tax unless it is the sale of a qualifying nonprofit admission ticket (this is explained in the fact sheet).
Examples of organizations that may qualify:

  • Youth groups, including scouts and youth sports associations
  • Senior citizen groups
  • Private schools, colleges, and universities
  • Churches
  • Volunteer fire departments

Examples of organizations that do not qualify:

  • Chambers of commerce
  • Knights of Columbus and Masonic Lodges
  • City-run celebrations
  • Homeowners’ associations
    Adult sports clubs

More detail can be found on the fact sheet, posted on the Department of Revenue website:

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.