New MN Retail Delivery Fee Begins July 1, 2024

Beginning July 1, 2024, the Minnesota Department of Revenue has instituted a new $0.50 delivery fee for retail sales delivered to customers located in Minnesota in which the sale is more than $100. The retail delivery fee applies to sales of tangible personal property or clothing. Minnesota Statutes, section 297A.61, subdivision 10a defines tangible personal property as personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. The retail delivery fee applies once per transaction and is not subject to sales tax if separately stated on the invoice. There are several exemptions for the new delivery fee as outlined below.

Exempt Items

  • Drugs
  • Medical devices, accessories, and supplies
  • Food, food ingredients, or prepared food.
  • Certain baby products.
  • Reference the Minnesota Revenue Site for a full list of exemptions.

Small Business Exemption for Reporting and Collection

  • A retailer, who for the previous calendar year, had Minnesota retail sales that totaled less than $1,000,000
  • A marketplace provider facilitating a sale for a retailer, who during the previous calendar year, made Minnesota retail sales through the marketplace that totaled less than $100,000

The Retail Delivery Fee does not apply to:

  • Deliveries to a purchaser that is exempt from sales tax
  • Deliveries by motor vehicles with permits issued under Minnesota Statutes, Chapter 169 or 221
  • Deliveries by a food and beverage service establishment, whether made by a third party delivery service or the actual establishment
  • Purchases picked up at the retailer’s business location, including curbside delivery
  • Deliveries to locations outside of Minnesota

Charges for the following items are not included when determining whether a transaction equals or exceeds $100:

  • Sales made to retailers for the purpose of resale
  • Utilities, such as natural gas and electricity
  • Items delivered electronically (e.g., computer software)

Please work with your CPA for any questions.

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DISCLAIMER: This blog is provided for informational purposes only and is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant. Presentation of the information in this article does not create nor constitute an accountant-client relationship. While we use reasonable efforts to furnish accurate and up-to-date information, the evolving landscape surrounding these topics is supported by regulations or guidance that are subject to change.

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