Hospitals, sanatoriums, nursing homes, assisted-living facilities, and senior citizens’ homes must charge sales tax on the meals and snacks they sell to anyone other than patients or residents. This affects all cafeterias, cof- fee shops, candy stands and vending machines in the facilities.
Patient or resident meals
Only meals and snacks customarily provided to patients as part of their routine care and included in the hospital’s charges are exempt from tax. That is, if a patient is served a meal in his or her hospital room by hospital personnel, the meal is exempt. But if the patient buys food from the hospital’s snack shop or vending machine, that food is taxable.
If a resident of a senior citizens’ home eats in the home’s resident dining room, the meal is exempt. But if he or she buys a meal or snack at a candy stand or vending machine in the center, it’s taxable.
Meals served to guests who are visiting residents are taxable. Charge tax on the meal if the guest pays for the meal or if the resident is billed for the meal as a separate charge.
Employees must pay sales tax on the amount charged to them for meals.
Vending machine sales
All sales through vending machines and at candy stands and similar facilities are taxable whether they are run by the institution’s own personnel or by an outside organi- zation or contractor, such as a hospital auxiliary or cater- ing service.
When to charge tax?
When you bill patients or residents for their care and the bill includes charges for their meals, you should not charge sales tax. But if you operate a coffee shop, candy stand, or similar facility, charge sales tax on the taxable food items you sell there.
Examples of taxable items
All sales of food in a cafeteria or snack bar are taxable. Examples of taxable items at candy shops include:
- candy and gum
- all food in vending machines
- heated foods, drinks (including “take-out” items)
See Fact Sheets 102A through 102E for more information on food, candy, soft drinks, prepared food, and dietary supplements.
Local sales taxes
If you are located or working in an area with a local tax, local sales or use tax may also be due. Local taxes are listed and explained in detail in Fact Sheet 164, Local Sales and Use Taxes.
- Minnesota Statute section 297A.67, Subd. 4. Exempt meals at residential facilities
- Minnesota Statute section 297A.67, Subd. 6. Other exempt meals
Other fact sheets you may need
Click here for more Minnesota Sales Tax Guides.
This fact sheet is intended to help you become more familiar with Minnesota tax laws and your rights and responsibilities under the laws. Nothing in this fact sheet supersedes, alters, or otherwise changes any provisions of the tax law, administrative rules, court decisions, or revenue notices. Alternative formats available upon request.
This post has been adopted from the Minnesota Department of Revenue’s Sales Tax Fact Sheet #118, Hospital and Nursing Home Meals.