On July 1, 2024, Minnesota will begin imposing a retail delivery fee of 50 cents that will apply to transactions involving retail delivery in Minnesota. Check with your TaxOps Advisor or third-party software provider.

Starting July 1, 2024, the Minnesota Department of Revenue will begin imposing a Retail Delivery Fee of 50 cents to certain transactions involving retail delivery in Minnesota. (See Minnesota Statutes, Chapter 168E)

The fee applies to each transaction where charges for these items equal or exceed $100:

  • Tangible personal property subject to sales tax
  • Clothing

When calculating whether a transaction meets or exceeds the $100 threshold, a transaction includes all charges that are part of the sale, not including the Retail Delivery Fee. See Examples below.

The Retail Delivery Fee:

  • Is not subject to sales tax if separately stated on the receipt or invoice
  • Applies once per transaction, regardless of the number of shipments made
  • Is shown as a separate line item on the receipt as “Road Improvement and Food Delivery Fee”
  • Follows Minnesota sourcing rules for application

Retailer Exclusions

Taxpayers are not liable for the Retail Delivery Fee if they are one of the following: 

  • 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

When calculating the retail sale threshold for the retailer exclusion, MNDOR includes all taxable and nontaxable retail sales. Do not include sales where the purchaser is buying for resale. The purchaser must provide an exemption certificate.

Charges for the following items are not included when determining if the transaction meets or exceeds the $100 threshold:

  • Drugs
  • Medical devices, accessories, and supplies
  • Food, food ingredients, or prepared food

While certain baby products are exempt from the fee, others are still subject to sales tax, including breast pumps, baby bottles and nipples, baby swings, baby wipes, bottle sterilizers, car seats and car seat bases, changing tables and pads, cribs and bassinets, including mattresses and sheets, infant eating utensils, infant syringes, pacifiers, strollers, and teething rings.

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)

The Retail Delivery Fee is​ not refundable if any or all items purchased are returned to a retailer or if the retailer provides a refund or credit in the amount equal to or less than the purchase price. If the retail delivery is canceled by the purchaser, retailer, or delivery provider, the Retail Delivery Fee must be​ refunded to the purchaser.

The MNDOR indicates it will register retailers for the Retail Delivery Fee taxline. Taxpayers who are not registered for the taxline must log in to their e-Services account and add the Retail Delivery Fee taxline.

For details, refer to the MNDOR release at MN Retail Delivery Fee . Check with your TaxOps Advisor or third-party software provider.

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