About Mankato’s Food and Beverage Tax

Items subject to the half percent tax are served food and beverages and ticket sales for entertainment purposes.  The half-percent tax does apply to liquor.

The following are examples of transactions that generally would be subject to the Minnesota general sales or use tax as either admissions or entertainment transactions. Please note that this is a representative listing and "is not" all-inclusive.

• Theatres (movies)/motion pictures
• Circuses
• Ballet performances
• Ice skating shows
• Musical concerts
• Opera performances
• Rodeo
• Sporting events (except high school regular season games or activities sponsored by the Minnesota High School League under M.S. 297A.7-0 Subd. 11)
• Wrestling or boxing events (except as above)
• Carnivals

The intent of the ordinance "is not" to enforce the tax upon nonprofit tickets or admissions as defined under M.S. 297A.70 Subd.10(b). The intent of the ordinance "is not" to enforce the tax upon high school athletic events as defined under M.S. 297A.7-0 Subd 11.  The intent of the ordinance "is not" to enforce the tax upon memberships at health clubs or spas.

 The intent is for establishments to remit sales tax payments directly to the Minnesota Department of Revenue.

How Mankato's half-percent food and beverage proceeds are used:

• Fund operational costs at the civic center. 

History
Previously these costs were covered by the half-percent sales tax; however, in 2008 legislation eliminated operational costs as a possible use but chose to give the community an option of a food and beverage tax as a replacement.  The City Council passed an ordinance on September 8, 2008, and the ordinance became effective January 1, 2009.  As per the Minnesota Department of Revenue, the implementation date is April 1, 2009. 

The implementation of a food, beverage and entertainment tax was in lieu of levying a property tax for civic center operations.  The civic center provides a great return on investment by generating an economic impact of $20 million/year which stimulates greater Mankato's economy in many ways.  It is a great example of maximizing on public investment because of its economic input into the area.

How often is the civic center used? 
Daily.  There are 700 events held in a typical year at the civic center.  This includes events large and small, and everything in between.

Does the civic center show a profit?
The civic center's job is to be a loss leader.  The primary benefit is to stimulate spending in the community.  In general, civic centers do not make money; rather, they exist for the greater good of the community.

Do people come to Mankato to go to the civic center?
Yes.  The civic center is a destination.  In surveys conducted by the Greater Mankato Convention and Visitors Bureau Tour Team, participants consistently rank the civic center as the 2nd major attraction for Mankato (second only to shopping).