AI Generated Summary
Purpose
- The bill changes the definition of “prepared food” for Minnesota’s sales and use tax, clarifying which foods are taxed as prepared foods and which are not.
Main Provisions
- Amends Minnesota Statutes 2024 section 297A.61 subdivision 31 to redefine prepared food.
- Prepared food is defined as food that meets either of these conditions:
- (1) The food is sold with eating utensils provided by the seller (including plates, knives, forks, spoons, glasses, cups, napkins, or straws).
- (2) The food is sold in a heated state or heated by the seller, or two or more food ingredients are mixed or combined by the seller for sale as a single item.
- Exceptions (items not considered prepared food, even if they might fit the general conditions above):
- (i) Bakery items, including but not limited to bread rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas, and similar items.
- (ii) Ready-to-eat meat and seafood in an unheated state sold by weight.
- (iii) Eggs, fish, meat, poultry, and foods containing these raw animal foods that require cooking by the consumer as recommended by the FDA Food Code (specifically referencing 21 CFR 401.11).
- (iv) Food that is only sliced, repackaged, or pasteurized by the seller.
- (v) Food sold by a seller whose primary NAICS classification is in manufacturing in sector 311, except subsector 3118.
What This Changes About Tax Treatment
- The definition clarifies which foods are taxed as “prepared food” versus foods that are considered groceries or non-prepared foods.
- Bakery items are explicitly exempt from being counted as prepared food for tax purposes, even if they might otherwise appear to fit the criteria.
- Certain raw or prepared items (e.g., unheated ready-to-eat meats by weight; raw animal foods requiring cooking per FDA guidance) are excluded from the prepared-food category.
- Foods produced by manufacturers in sector 311 (with the 3118 exception) have a defined treatment under the prepared-food rule.
Significant Changes to Existing Law
- Replaces or clarifies the prior interpretation of what counts as prepared food for sales tax.
- Tightens or specifies exemptions to reduce the scope of what is taxed as prepared food, particularly for bakery items, specific unheated ready-to-eat meats, raw animal foods requiring cooking, sliced/repackaged/pasteurized items, and certain manufacturing-sector foods.
Implications for Taxpayers and Businesses
- Restaurants, grocery stores, bakeries, and manufacturing-related food sellers may see changes in whether certain items are taxed as prepared foods.
- The exemptions could reduce the number of items taxed as prepared food in some categories (e.g., bakery items) and confirm non-taxable status for others (e.g., unheated ready-to-eat meats by weight, certain raw animal foods).
Practical Takeaways
- If you sell or buy bakery items, those items are not treated as prepared food for tax purposes under this bill.
- If you sell unheated ready-to-eat meat and seafood by weight, or foods containing raw animal ingredients that require cooking by the consumer, these are not considered prepared food.
- Items sliced, repackaged, or pasteurized by the seller are not considered prepared food.
- Food sold by manufacturers in sector 311 (except subsector 3118) is subject to the defined rules for prepared food.
Terminology for Clarity
- Prepared food
- Eating utensils
- Ready-to-eat
- Unheated state
- Mixed or combined ingredients
- Bakery items
- NAICS (North American Industry Classification System)
- Sector 311 (food manufacturing)
- Subsector 3118
- FDA Food Code, 21 CFR 401.11
Effects to Watch
- The bill’s changes may shift certain items between taxable and non-taxable categories, affecting receipts for retailers and purchases for consumers.
Relevant Terms - prepared food - eating utensils - heated state - mixed or combined - bakery items - ready-to-eat meat and seafood - unheated state - eggs - fish - meat - poultry - foods containing raw animal foods - slicing / repackaging / pasteurization by seller - NAICS - sector 311 - subsector 3118 - FDA Food Code - 21 CFR 401.11
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 25, 2026 | Senate | Action | Introduction and first reading | ||
| March 25, 2026 | Senate | Action | Referred to | Taxes |
Citations
[
{
"analysis": {
"added": [
"No new statutes or sections created; the amendment revises the existing definition by enumerating conditions that constitute 'prepared food', including foods sold with eating utensils, foods heated by the seller, foods mixed or prepared as a single item, and various categories of foods such as bakery items, ready-to-eat meat and seafood, raw animal foods requiring cooking as per FDA guidance, foods that are sliced, repackaged, or pasteurized by the seller, and foods sold by certain manufacturing NAICS classifications."
],
"removed": [],
"summary": "This bill amends Minnesota Statutes 2024 section 297A.61, subdivision 31, to modify the definition of 'prepared food' for sales and use tax purposes.",
"modified": [
"The definition of 'prepared food' (Subd. 31) is amended to read with specific enumerated criteria (i–v)."
]
},
"citation": "297A.61",
"subdivision": "subdivision 31"
}
]Progress through the legislative process
In Committee