If you sold $1 million or more into Minnesota last year, your checkout needs a new line item. Starting July 1, 2024, Minnesota followed Colorado with a retail delivery fee of 50 cents per transaction on orders of $100 or more. Kelley Birrell covers which sales the fee applies to, how it has to appear on the receipt, and where to add it in Shopify.
Sales Tax
Minnesota Retail Delivery Fee: Everything You Need to Know
3 min
Transcript
0:00 What the fee is
Today I want to dive into a new topic affecting online sellers who ship orders into the state of Minnesota. So if you sell into Minnesota, pay attention.
As of July 1st, 2024, Minnesota will follow the lead of Colorado and introduce a new retail delivery fee of 50 cents per transaction. This fee is intended to help fund the repair and upgrade of Minnesota's roads and bridges. Let's break this down so you know what it means for you.
0:22 What you need to know
There are four important things to know.
One, the Minnesota retail delivery fee is a flat rate of 50 cents per transaction on retail orders over a hundred dollars, regardless of the number of shipments made.
Two, the retail delivery fee applies to most retail sales of tangible personal property that are delivered in Minnesota, subject to Minnesota sales tax, and have a sales price of a hundred dollars or more before state and local sales and use taxes are applied. Note, there are some products that are specifically exempt from this tax. We've linked to a list in the description below.
Three, this fee is only required for sellers who sell a million dollars or more per calendar year into the state, and this is determined by the previous year's sales.
1:06 What to do about it
Now, let's talk about how this affects your ecommerce business. As an online seller, if you sell a million dollars or more into the state each year, then you need to incorporate this into your checkout process. It needs to show up as a separate line item on the receipt for 50 cents, that is entitled the Road Improvement and Food Delivery Fee.
If you are selling on Shopify, you can make this change by going to settings, then shipping and delivery, and manage rates, to add this custom fee to deliveries into Minnesota. You may want to consider notifying your customers on your frequently asked questions page.
To wrap things up, the Minnesota retail delivery fee is a small change that you need to be ready for by July 1st, 2024. You can do that by updating your checkout process, notifying your customers, and staying compliant with this new state regulation.
If you need help with Minnesota retail delivery fee or sales tax in general, be sure to reach out to us from the link in the description below. We have a whole team of sales tax experts who are happy to help.
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