Summary: This blog post discusses the newly introduced Retail Delivery Fee in Minnesota, its potential impact on e-commerce businesses, and additional changes in the state’s tax landscape.
In the ever-changing landscape of e-commerce, staying ahead of new laws and regulations is vital for success. As part of our commitment to help you navigate these changes, we’re shedding light on a new development in Minnesota: the introduction of a Retail Delivery Fee. Implemented under the recent bill H.F. 2887, this fee has potential implications for businesses operating in Minnesota, especially those in the e-commerce sector.
Understanding Minnesota’s Retail Delivery Fee
Starting July 1, 2024, Minnesota will impose a 50-cent fee on retail sales over $100. This Retail Delivery Fee is a component of a larger initiative aimed at funding transportation projects across the state. As an e-commerce business owner, it’s crucial to understand the ins and outs of this fee and how it might affect your operations.
Who Will Be Affected by the Retail Delivery Fee?
The Retail Delivery Fee targets primarily larger businesses. If your retail sales were $1 million or less last year, you’re off the hook. However, this doesn’t only apply to sales made within Minnesota. The legislation does not specify that the $1 million threshold is exclusive to Minnesota sales. Therefore, if your business accrued over $1 million in sales anywhere in the United States, the delivery fee would apply. We will update this blog post if Minnesota later clarifies that the $1 million threshold is referring to Minnesota sales only.
Marketplace providers who collect for sellers with retail sales of $100,000 or less in Minnesota in the previous year are also exempt. Additionally, the fee does not apply to certain types of products, including food, drugs and medical supplies, and baby products.
Implications for Your E-commerce Business
For businesses with over $1 million in retail sales last year, it’s time to plan for this change. Starting July 1, 2024, you’ll need to include this 50-cent fee on each delivery order exceeding $100. Importantly, this fee must be displayed as a separate item on receipts and invoices. As a business, you may need to update your billing systems and inform your customers about this change to maintain transparency.
TaxValet can assist our clients with setting up their systems to collect Minnesota’s Retail Delivery Fee as part of our all-inclusive service. If you’re interested in learning more about our service, consider scheduling a free initial consultation with our team of experts.
Where Can You Learn More About Minnesota’s Retail Delivery Fee?
For a deeper dive into H.F. 2887 and the new Retail Delivery Fee, the official Minnesota Legislature website is a comprehensive resource. Remember, staying informed is the first step to ensuring your business adapts and thrives amid regulatory changes.
In conclusion, the introduction of the Minnesota Retail Delivery Fee is a significant development that e-commerce businesses should be prepared for. While the fee primarily affects larger businesses, it underscores the importance of understanding local regulations. Stay tuned for more updates and tips to help you navigate the evolving e-commerce landscape.
Disclaimer: Nothing on this page should be considered tax or legal advice. Information provided on this page is general in nature and is provided without warranty.