Are you required to charge or collect the new “Minnesota Retail Delivery Fee”?
The new retail delivery fee for Minnesota begins on July 1st, 2024. This is a 50-cent fee on retail delivery transactions in Minnesota. Here are the basics of who is required to pay it, and which transactions will be subject to the fee.
Who is Required to Pay the Fee?
The fee will be applicable to any retailer subject to sales tax in Minnesota, unless you are a small retailer and meet one of the following:
- less than $1 million in Minnesota retail sales in the previous calendar year
or - a marketplace provider facilitating for a retailer with less than $100,000 in Minnesota sales in the previous year
Applicable Transactions
If you are not exempt through one of the above, you must pay the fee on a transaction that is delivered in Minnesota and is over the $100 threshold. Items that contribute to the threshold are any tangible personal property subject to tax, including clothing. When calculating the threshold, the fee does not count in the total.
Exemptions from the Fee
Certain products or orders are exempt from the retail deliver fee, such as:
- Food, prepared food, prescription drugs, medical devices, baby products and certain motor vehicles
- Sales that take place at the retailer’s business location, such as curbside delivery
- Deliveries to locations outside of Minnesota
- Retail deliveries made to exempt purchasers
Implementation Details
The fee is not subject to sales tax if separately stated, and only applies once per transaction. If one purchase takes twenty shipments, the fee only applies once. Retailers are not required to charge this fee to customers.
Compliance and Record Keeping
Beginning in July, be sure to track your orders that require delivery and are subject to the fee. Put the fee on your customers invoice, if preferred, as the “Road Improvement and Food Delivery Fee.” This fee will be collected on your normal sales tax payment schedule alongside your normal filing.
Additional Resources
The Minnesota Revenue Website provides examples and frequently asked questions as another resource for businesses.
Questions?
Have questions regarding your specific situation? Please reach out to our team.
