What is the Minnesota retail delivery fee?
by July 8, 2024
As of July 1, 2024, Minnesota began requiring retailers to collect a new retail delivery fee. This fee applies to transactions involving retail delivery made to a location in Minnesota where charges for taxable tangible personal property (including clothing) equal or exceed $100. We outline the important details of the fee in this blog post.
How much is the Minnesota retail delivery fee?
The retail delivery fee is 50 cents per transaction.
When and how do I report and remit the fee to the state of Minnesota?
Applicable sellers are required to report the total collected amount on the “Retail Delivery Fee” line of their Minnesota Sales and Use Tax Return, whenever they usually file their sales tax return.
If you have multiple business locations, you will report the total amount collected for all your locations on one return. Failure to file or pay this fee will result in penalties or interest.
Are there any businesses that are exempt from the retail delivery fee?
Yes, a business is not required to collect the retail delivery fee if the following apply:
- If the retailer had less than $1,000,000 in retail sales in Minnesota in the previous calendar year
- If the business is a marketplace that facilitates sales for retailers that generated less than $100,000 in sales in the previous calendar year
When determining if you apply to the exclusions listed above, include all taxable and nontaxable sales in your calculations, but do not include sales where the purchaser bought an item for resale using an exemption certificate.
Are any items exempt from the retail delivery fee?
Yes, charges for the following items should not be included when determining if the transaction meets the $100 threshold:
- Drugs
- Medical devices, accessories, and supplies
- Food, food ingredients, or prepared food
- Certain baby products (a full list of baby products and their exempt status can be found here)
- Utilities such as natural gas or electricity
- Items delivered electronically
The retail delivery fee applies even if free shipping is available.
Do I have to register to collect the fee?
No, the state will register businesses for the retail delivery fee. If you do not see the line item for the fee on your return, you may need to add the fee. More information on adding the fee to your return here.
For more information about the Minnesota retail delivery fee, please visit the Minnesota Department of Revenue website.
Can TaxJar help me collect the Minnesota retail delivery fee?
Since the retail delivery fee is not a sales tax, TaxJar does not provide support for this fee. However, Stripe Tax does support the Minnesota retail delivery fee. TaxJar was acquired by Stripe in 2021 to to accelerate the future of commerce and compliance. Available in over 50 countries, Stripe Tax enables you to automatically calculate and collect the right amount of tax based on where you are registered, where your customers are located, and what you are selling. Stripe Tax also helps you monitor your obligations and provides reporting for filing and remittance. Learn more about Stripe Tax here.
If you need help managing your sales tax compliance in Minnesota, or any other states in the US, TaxJar can help. From calculating the right sales tax rate to automating your sales tax returns, TaxJar can streamline the entire compliance process for you. Get started today with a free, 30-day TaxJar trial.
