Starting July 1, 2024, Minnesota is imposing a $0.50 delivery fee on taxable goods over $100 delivered within the state. This fee applies regardless of the delivery method or origin, and must be listed separately on invoices. Certain goods (food, medicine, etc.) and retailers with low sales are exempt.
For official guidance see the Minnesota Department of Revenue website and consult your tax advisor. We are not in the business of providing tax or accounting advice.
Minnesota Retail Delivery Fee (Effective July 1, 2024)
What is it? A $0.50 fee applied to certain retail deliveries within Minnesota.
When does it apply?
- Transaction total: $100 or more of taxable tangible personal property and clothing (excluding the fee itself and exempt items listed below)
- Location: Delivery within Minnesota
Items Exempt from the Fee:
- Drugs
- Medical devices, accessories, and supplies
- Food, food ingredients, or prepared food
- Certain baby products (some may still be subject to sales tax)
Important Notes:
- Calculation: The $100 threshold ONLY includes charges for taxable tangible personal property and clothing.
- Frequency: Charged once per transaction, regardless of the number of shipments
- Display: Shown as a separate line item on receipts as “Road Improvement and Food Delivery Fee”
- Tax: Not subject to sales tax if stated separately
- Sourcing: Follows Minnesota sourcing rules
Refunds:
- Not refundable: If items are returned or the retailer provides a refund/credit equal to or less than the purchase price.
- Refundable: If the delivery is canceled by the purchaser, retailer, or delivery provider.
Who is exempt?
- Retailers: With less than $1 million in Minnesota retail sales in the prior year. This calculation includes all taxable and nontaxable retail sales, but excludes sales for resale (with a valid exemption certificate).
- Marketplace providers: Facilitating sales for retailers with less than $100,000 in sales through the marketplace in the prior year
Additional Considerations:
- The fee can be collected from the purchaser or paid directly by the retailer.
- Retailers must update their systems to calculate and collect the fee.
Sage 100 users have multiple options to manage this fee:
- Manual Miscellaneous Charge: Add a $0.50 charge to applicable orders/invoices.
- New Sales Tax Code: Automatically calculates the fee when the taxable amount exceeds $100.
- AvaTax: Utilizes AvaTax’s built-in tax rule for automatic fee calculation.
- DSD Extended Solution SO-1052: Automates the addition/removal of the fee based on order criteria.
The DSD Extended Solution SO-1052 is one option to assist you in resolving this new requirement. The solution offers automation, flexibility, and accuracy in handling this and future state-specific fees.
For step-by-step instructions on your options to handle this new sales tax requirement see this excellent summary from Jon Reiter.
