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HF2961 (Legislative Session 94 (2025-2026))

Sales and use tax exemption for certain meals and drinks provided by a restaurant expanded.

AI Generated Summary

Purpose

  • The bill expands the sales and use tax exemption to include meals and beverages provided free of charge to a customer by a restaurant.

Main Provisions

  • Adds a new subdivision (Subdivision 47) to Minnesota Statutes 2024, section 297A.68.
  • Creates an exemption for “complimentary meals and beverages.”
  • Text specifies that meals and beverages, including alcoholic beverages, provided by a restaurant at no cost to the customer are exempt from sales and use tax.
  • The exemption applies to meals and beverages as defined for restaurants under section 157.15, subdivision 12 (i.e., a restaurant context).

What this changes in practice

  • Restaurants that give away meals or beverages for free to customers would not be required to collect or remit sales tax on those items.
  • This changes how some promotional offers, freebies, or complimentary items are taxed under the state sales tax system.

Significance and potential impact

  • Broadens the set of items that are not taxed when given away for free by restaurants.
  • Could affect restaurant pricing, marketing promotions, and overall tax revenue from complimentary items.

Scope and definitions

  • Applies specifically to “meals and beverages” provided by a restaurant (as defined by relevant restaurant definitions in current law).
  • Includes alcoholic beverages within the exemption.

Relevant Terms - complimentary meals and beverages - exemption - sales and use tax - Minnesota Statutes 2024 section 297A.68 - subdivision 47 - restaurant - alcoholic beverages - section 157.15, subdivision 12

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
April 01, 2025HouseActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Adds Subd. 47: Complimenary meals and beverages exempt from tax when provided at no cost by a restaurant.",
        "Exemption applies to meals and beverages including alcoholic beverages."
      ],
      "removed": [],
      "summary": "This bill adds a new subdivision to Minn. Stat. § 297A.68 to exempt complimentary meals and beverages, including alcoholic beverages, provided by a restaurant from sales tax.",
      "modified": []
    },
    "citation": "297A.68",
    "subdivision": "subd. 47"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references Minn. Stat. § 157.15, subd. 12, to define what constitutes a restaurant for the purposes of the exemption.",
      "modified": []
    },
    "citation": "157.15",
    "subdivision": "subd. 12"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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