State Clarifies Sales Tax Exemption for Ball Fields and Recreation Spaces

Cities may be eligible for a refund of sales or use tax paid since Jan. 1, 2014.
(Published Jul 28, 2014)

The Department of Revenue (DOR) last week announced that certain city purchases related to ball fields and some other recreational spaces may be eligible for a refund of sales and use taxes already paid to the state. The DOR had initially determined that ball fields and other similar recreational spaces did not qualify for the sales tax exemption due to a clause in the law that did not exempt purchases by cities of “goods and services generally provided by private businesses.”

According to the department, after further research and additional information, the DOR has determined that these recreational spaces, in fact, qualify for the local government exemption. Retroactive to Jan. 1, 2014, purchases by a local government for ball fields, tennis courts, soccer fields, etc., are exempt from sales tax. “Local governments” means cities, counties, townships, and qualifying cooperative agreements.

The exemption for ball fields and other similar recreational spaces is permanent under the exemption clarifications enacted by the 2014 Legislature and the exemption for these purchases will also become available for additional local government entities, including joint powers entities starting Jan. 1, 2016.

What if tax was already paid?
According to the DOR, there are two options if local governments have paid tax on purchases for these recreational areas since Jan. 1, 2014: file a claim for a refund using Form ST11-PUR, Purchaser Sales Tax Refund Claim, or seek a refund from the vendor.

Access Form ST11-PUR for Purchaser Sales Tax Refund Claim

Local governments that remitted use tax on purchases for these recreational areas since Jan. 1, 2014, may amend their use tax return and receive a refund of the amount overpaid.

Questions?
The DOR is sending information about this change to those individuals who contacted the department and asked a question about ball fields or other similar recreational spaces. Additional questions about this change may be directed to Penny Demko at salesuse.tech@state.mn.us. The department has also updated the local government sales tax exemption fact sheet to answer questions about the most recent 2014 law changes.

View the DOR fact sheet (pdf)

Other changes to the exemption
The 2014 Legislature also enacted several other significant changes to the 2013 local government sales tax exemption that expanded the list of available exempt city purchases, effective July 1. The changes will also expand the exemption beginning on Jan. 1, 2016, to joint powers entities, housing and redevelopment authorities, economic development authorities, port authorities, and other local government entities. (Read related article.)

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