Form ST 16 Application for Nonprofit Exempt Status - Sales Tax - Minnesota

Form ST16 is a Minnesota Department of Revenue form also known as the "Application For Nonprofit Exempt Status - Sales Tax". The latest edition of the form was released in November 1, 2015 and is available for digital filing.

Download a fillable PDF version of the Form ST16 down below or find it on Minnesota Department of Revenue Forms website.

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ST16
Application for Nonprofit Exempt Status—Sales Tax
Please read carefully and complete the attached application if you wish to apply for sales and use tax exempt status. Be sure
to provide all the required supporting documentation requested for the organization. Applications received without the
required supporting documentation will not be processed.
Under Minnesota law, some nonprofit organizations may purchase certain items without paying sales tax. These organizations
must receive formal authorization from the Minnesota Department of Revenue and use Form ST3, Certificate of Exemption, in
order to make tax-free purchases. The exemption applies only to purchases made by the nonprofit organization; it does not allow
the organization to sell items without collecting sales tax.
Note: Nonprofit organizations that qualify for federal income tax exemption are not automatically exempt from Minnesota
sales tax.
Read the list below to determine if the group is eligible for exemption from Minnesota sales and use tax.
Use this application if the group is:
• Organized and operated exclusively for charitable, religious or educational purposes and has obtained exemption from federal
income tax under section 501(c)(3) of the Internal Revenue Code; or
• A senior citizen group that is organized for pleasure, recreation or other nonprofit purpose, not including housing. The group
must be an exempt organization under 501(c) of the Internal Revenue Code and must limit membership to those who are age
55 years or older or are physically disabled; or
• A cemetery that is owned by a religious organization.
Examples of nonprofit organizations that may qualify for sales tax exempt status include churches, private schools, colleges and
universities, museums and historical societies, youth organizations, senior citizen groups and volunteer fire departments.
Examples of organizations that do not qualify for sales tax exempt status include Chambers of Commerce, Knights of Columbus,
Masonic Lodges, city-run celebrations, homeowners’ associations, fraternities, sororities, lake improvement associations,
medical clinics, Jaycees, Kiwanis and Lions Clubs, adult sports clubs of any type, trade associations, prayer societies, professional
associations, senior housing organizations and social clubs.
Hospitals and outpatient surgical centers generally do not qualify for sales tax exempt status, but are eligible for a separate
exemption under M.S. 297A.70, subd. 7.
What is Exempt?
The exemption applies only to purchases of items used in the performance of the charitable, religious or educational functions of
the exempt organization. The item or service must be sold directly to and paid for by the exempt organization.
The exemption does not apply in all cases. Organizations that have been granted sales tax exempt status must pay sales tax on the
following:
• Building, construction or reconstruction materials purchased by a contractor or a subcontractor as part of a lump-sum contract
or similar arrangement
• Construction materials purchased by the organization or a contractor to be used in constructing buildings or facilities that will
not be principally used by the exempt organization
• Prepared food, candy, soft drinks, and alcoholic beverages, including catered food
• Lodging
• Gambling equipment and supplies
• Most motor vehicles
• 9.2% car rental tax and 5% car rental fee
• Waste collection and disposal services (although this is a special tax, not a sales tax)
Helpful Reminders
• An organization is not exempt from Minnesota sales and use tax if it is not organized and operated exclusively for religious,
educational or charitable purposes.
• The fact that an organization is nonprofit does not necessarily make it an exempt organization for sales and use tax purposes.
• If an exempt organization attempts to influence legislation or intervene or participate in political campaigns they may lose
their income tax exempt status under section 501(c)(3) of the Internal Revenue Code and also jeopardize their sales tax exempt
status.
Continued
ST16
Application for Nonprofit Exempt Status—Sales Tax
Please read carefully and complete the attached application if you wish to apply for sales and use tax exempt status. Be sure
to provide all the required supporting documentation requested for the organization. Applications received without the
required supporting documentation will not be processed.
Under Minnesota law, some nonprofit organizations may purchase certain items without paying sales tax. These organizations
must receive formal authorization from the Minnesota Department of Revenue and use Form ST3, Certificate of Exemption, in
order to make tax-free purchases. The exemption applies only to purchases made by the nonprofit organization; it does not allow
the organization to sell items without collecting sales tax.
Note: Nonprofit organizations that qualify for federal income tax exemption are not automatically exempt from Minnesota
sales tax.
Read the list below to determine if the group is eligible for exemption from Minnesota sales and use tax.
Use this application if the group is:
• Organized and operated exclusively for charitable, religious or educational purposes and has obtained exemption from federal
income tax under section 501(c)(3) of the Internal Revenue Code; or
• A senior citizen group that is organized for pleasure, recreation or other nonprofit purpose, not including housing. The group
must be an exempt organization under 501(c) of the Internal Revenue Code and must limit membership to those who are age
55 years or older or are physically disabled; or
• A cemetery that is owned by a religious organization.
Examples of nonprofit organizations that may qualify for sales tax exempt status include churches, private schools, colleges and
universities, museums and historical societies, youth organizations, senior citizen groups and volunteer fire departments.
Examples of organizations that do not qualify for sales tax exempt status include Chambers of Commerce, Knights of Columbus,
Masonic Lodges, city-run celebrations, homeowners’ associations, fraternities, sororities, lake improvement associations,
medical clinics, Jaycees, Kiwanis and Lions Clubs, adult sports clubs of any type, trade associations, prayer societies, professional
associations, senior housing organizations and social clubs.
Hospitals and outpatient surgical centers generally do not qualify for sales tax exempt status, but are eligible for a separate
exemption under M.S. 297A.70, subd. 7.
What is Exempt?
The exemption applies only to purchases of items used in the performance of the charitable, religious or educational functions of
the exempt organization. The item or service must be sold directly to and paid for by the exempt organization.
The exemption does not apply in all cases. Organizations that have been granted sales tax exempt status must pay sales tax on the
following:
• Building, construction or reconstruction materials purchased by a contractor or a subcontractor as part of a lump-sum contract
or similar arrangement
• Construction materials purchased by the organization or a contractor to be used in constructing buildings or facilities that will
not be principally used by the exempt organization
• Prepared food, candy, soft drinks, and alcoholic beverages, including catered food
• Lodging
• Gambling equipment and supplies
• Most motor vehicles
• 9.2% car rental tax and 5% car rental fee
• Waste collection and disposal services (although this is a special tax, not a sales tax)
Helpful Reminders
• An organization is not exempt from Minnesota sales and use tax if it is not organized and operated exclusively for religious,
educational or charitable purposes.
• The fact that an organization is nonprofit does not necessarily make it an exempt organization for sales and use tax purposes.
• If an exempt organization attempts to influence legislation or intervene or participate in political campaigns they may lose
their income tax exempt status under section 501(c)(3) of the Internal Revenue Code and also jeopardize their sales tax exempt
status.
Continued
Instructions for Form ST16, continued
• An exempt organization must serve the public rather than a private interest to qualify for exemption from Minnesota sales and
use tax.
• The assets of an exempt organization must be dedicated to an exempt purpose to qualify for exemption from Minnesota sales
and use tax.
• An exempt organization must notify the Department of Revenue in writing if there is a change in its purpose or activities that
causes the organization to no longer qualify for sales tax exempt status. Failure to notify the department may be grounds for
retroactive revocation of the organization’s sales tax exempt status.
• Exempt organizations must enter their Minnesota Tax ID number on the completed Form ST3, Certificate of Exemption. This
form is provided to vendors when making purchases.
What to Expect During the Application Process
• Allow at least 90 days processing time to receive a determination on your application.
• We may request additional information to determine whether or not your organization qualifies for exempt status. If you do not
provide the additional information within 60 days, we will preliminarily deny your application.
• If you disagree with the preliminary denial you may provide more information within 60 days of the preliminary letter of denial.
• If you do not provide additional information, your application will be closed and you will receive a denial order. If you disagree
with the determination regarding the denial order, you will have 60 days from the date of the letter to appeal our determination.
Information and Assistance
Sales and use tax forms, fact sheets and other information are available on our website at www.revenue.state.mn.us.
If you need help in completing this application or have questions, call 651-296-6181 or 1-800-657-3777.
References:
Minnesota Statute, 297A.70, Subd. 4: https://www.revisor.mn.gov/statutes/?id=297A.70
Minnesota Rule 8130.6200: https://www.revisor.mn.gov/rules/?id=8130.6200
Send the completed application along with all required documentation to:
Minnesota Revenue
Mail Station 6330
St. Paul, MN 55146-6330
We may require additional information to establish the claimed exemption. After a review of the documentation you send,
we will send a letter indicating whether the organization qualifies for sales tax exempt status.
ST16
Application for Nonprofit Exempt Status—Sales Tax
Please carefully read and complete this application if your organization qualifies for exempt status. You must provide all
the required supporting documentation requested for the organization or your application will be returned.
Name of organization
Organization’s web address, if any
Mailing address
City
State
ZIP code
Daytime phone
Are donations to your organization deductible for Minnesota and federal income . . . . . . . . . .
Yes
No
tax purposes? The organization’s Minnesota or federal letter granting exemption from
income tax will state if donations to the organization are deductible for income tax purposes.
If the answer is “no” send us a copy of the IRS denial and/or an explanation of your income
tax exemption status.
Does your organization make retail sales of taxable items? . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yes
No
If the organization makes retail sales, you may need a Minnesota Tax ID number
If the organization already has a Minnesota tax ID number, enter the number here
If the organization does not have a Minnesota tax ID number, visit www .revenue .state .mn .us or call 651-282-5225
or 1-800-657-3605 to apply for one .
Type of Organization
The application must include all the requested documentation below in order for the Department to make a
determination on your exempt status . All applicants, except for home schools (see below), must provide a signed
copy of their Articles of Incorporation or Constitution and Bylaws . The documentation provided must indicate all of
the following:
The organization is nonprofit
The purpose of the organization
The earnings of the organization do not benefit any private shareholder or individual member
A dissolution statement
The organization is not attempting to influence legislation
Educational Organizations (Minnesota Statutes Chapter 297A.70, Subd. 4(a)(1))
“Educational” means the instruction or training of individuals to improve or develop their capabilities, or the
instruction of the public on subjects useful to the individual and beneficial to the community. Organizations
that qualify for exemption as educational include nonprofit schools (primary, secondary, colleges, universities,
home schools, nonprofit professional and trade schools), parent-teacher associations, school booster clubs and
youth organizations . Other educational organizations include museums, zoos, planetariums, symphony
orchestras, historical societies, and other similar organizations . Check the box below to indicate which type of
educational organization you are applying for and include the requested documentation with your application .
Home School
You must provide:
A signed affidavit stating that the school is a home school
Evidence of instructor qualifications as required under Minnesota Statutes, section 120A.22, Subdivision
10 (a copy of your current Minnesota teaching license, baccalaureate degree or the name along with an
attached copy of the license of the teacher you are directly supervised by)
The name of the school district in which your home school is located
Parent-Teacher Association
You must provide:
A signed copy of the organization’s signed Articles of Incorporation or Constitution and Bylaws
A letter from the principal of the school indicating the organization’s affiliation with the school
Continued
Application for Nonprofit Exempt Status—Sales Tax, p2
School (other than home school)
You must provide:
A signed copy of the organization’s Articles of Incorporation or Constitution and Bylaws
A copy of the organization’s federal 501(c) (3) letter granting exemption from income tax along with the
application (Federal Form 1023) submitted to the Internal Revenue Service for federal income tax exemp-
tion
A letter or brochure describing the specific purposes and activities of the organization
Income and Expense Statement for the last accounting period or a budget for the most recent year
Schools must also provide a letter describing the school’s curriculum, the location of the school, how
many students attend the school, and a listing of faculty members and their positions .
Youth Organization (such as Boy Scouts, Girl Scouts, YMCA, YWCA, and youth athletic and recreational
programs)
You must provide a signed copy of your Articles of Incorporation or Constitution . The Articles of
Incorporation must state members are youth, ages 18 and under. Scout troops may provide a copy of their
Charter if they do not have Articles of Incorporation or a Constitution .
Other Educational Organization
You must provide:
A signed copy of the organization’s Articles of Incorporation or Constitution and Bylaws
A copy of their federal 501(c)(3) letter granting exemption from income tax, along with the application
submitted to the Internal Revenue Service for federal income tax exemption, if applicable.
A letter or brochure describing the specific purposes and activities of the organization
Income and Expense Statement for the last accounting period or a budget for the most recent year
Religious Organizations (Minnesota Statutes Chapter 297A.70, Subd. 4(a)(1)
“Religious” means an institution that conducts worship services at regular intervals at an established place of
worship, and organizations that are affiliated with or related to that institution which exist exclusively for the fur-
therance of the religious purposes of the institution .
Religious Organization
You must provide:
A signed copy of the organization’s Articles of Incorporation .
A copy of the 501(c) (3) letter granting exemption from income tax, along with a copy of the application
(federal Form 1023) submitted to the Internal Revenue Service for federal income tax exemption.
A letter or brochure describing the specific purposes and activities of the organization.
An income and expense statement for the last accounting period or a budget.
If the organization owns real property, include a statement indicating whether the property is exempt
from local property taxes. Please inform us if the organization does not own real property or has not ap-
plied for property tax exemption .
Churches must also provide documentation, such as a bulletin, showing the organization’s place of wor-
ship and time of worship services .
Other religious organizations (such as a ministry) must also provide a letter on the letterhead of the
church that they are affiliated with explaining the affiliation.
Charitable Organizations (Minnesota Statutes Chapter 297A.70, Subd. 4(a)(1)
Charitable organizations include those that provide relief of the poor, underprivileged, and distressed, the
care of the sick, the infirm, or the aged; the erection of maintenance of public buildings and monuments;
lessening of the burdens of government; lessening of neighborhood tensions; elimination of prejudice and
discrimination; defense of human and civil rights; providing qualified low-income housing; and combating
community deterioration and juvenile delinquency.
Continued
Application for Nonprofit Exempt Status—Sales Tax, p3
Volunteer fire departments that are separate organizations from the city may qualify as charitable, provided they
have their own Articles of Incorporation or Constitution .
The following factors will be considered when determining whether or not an organization qualifies for sales tax
exemption as exclusively charitable:
The organization must be conducted without a view to profit
The organization must be supported in part by benevolent contributions
The organization must provide its charitable goods/services to recipients free or at least reduced costs
The organization must be open to the public generally without restriction
The organization must be organized and operated so that its charitable aids reach an indefinite number of
people
The organization must be organized and operated so that its commercial activities, if any, are subordinate
to or incidental to its charitable activities .
Charitable organization
You must provide:
A signed copy of the organization’s Articles of Incorporation.
A copy of 501(c) (3) letter granting exemption from income tax, along with a copy of the application for
federal income tax exemption (Federal Form 1023) .
A letter or brochure describing the specific purposes and activities of the organization.
An income and expense statement or budget for the last accounting period.
If the organization owns real property, include a statement indicating whether the property is exempt from
local property taxes. Please inform us if the organization does not own real property or has not applied for
property tax exemption .
Documentation that explains how the organization meets the six factors listed above.
Senior Citizen Groups (Minnesota Statutes Chapter 297A.70, Subd. 4(a)(2))
Senior citizen groups or associations that are organized and operated exclusively for pleasure, recreation, and
other nonprofit purposes, not including housing, qualify for exempt status provided:
The organization is exempt under 501(c) of the Internal Revenue Code
The membership to the organization is in general limited to persons age 55 or older, or physically dis-
abled .
List names of principal officers and the office held by each.
Name
Title
Name
Title
Name
Title
I certify that the above statements are correct to the best of my knowledge and belief, that accompanying
documents are true copies of original documents and that I am authorized to sign this application.
Signature
Title
Date
(Rev . 11/15)

Download Form ST 16 Application for Nonprofit Exempt Status - Sales Tax - Minnesota

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