Minnesota Imposes Retail Delivery Fee

Date June 9, 2023
Article Authors

Minnesota will become the second state, joining Colorado, to impose a retail delivery fee on retail delivery transactions in Minnesota. The 50-cent fee is effective July 1, 2024 and applies to retail delivery transactions of $100 or more. The fee does not apply to products or purchasers generally exempt from sales tax with the notable exception of clothing.

The new fee is modeled after Colorado’s retail delivery fee, but Minnesota attempted to learn from the issues Colorado experienced with their fee. Some of the key points on the administration of the fee and the requirements imposed on retailers include:

  • Retailers are allowed to pay the fee on behalf of customers to simplify administration and reporting.
  • Sellers with retail sales of less than $1mm are exempt from collecting the fee.
  • Retailers are required to separately list the fee on their invoices or receipts.
  • The invoice/receipt must state that the fee is designated for road improvements.
  • Minnesota’s Department of Revenue has not formalized the filing process for the fee as of this writing. The emergence of retail delivery fees is troublesome for retailers as they are yet another layer of tax and fee to administer and report. Invoicing and order systems may require programming to address the retail delivery fee as well as the exemptions and exceptions.

    If you have questions on Minnesota’s new retail delivery fee or other SALT matters, please contact HBK’s SALT Advisory Group at hbksalt@hbkcpa.com.

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