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Minnesota requires certain sellers to collect tax on in-state sales starting October 1

The Minnesota Department of Revenue will require remote sellers and marketplace providers facilitating sales into Minnesota to collect sales tax no later than October 1, 2018. 

Remote Sellers
Minnesota law requires all sellers to collect sales or use tax to the extent allowed under the United States Constitution.

The June 21 U.S. Supreme Court decision in South Dakota v. Wayfair allows states like Minnesota to require remote sellers with no physical presence, such as online and mail-order companies, to collect and remit the applicable sales or use tax on sales delivered to locations within their state. The Court’s decision in Wayfair caused Minnesota’s existing law, which was enacted in 1989, to become effective.

Remote sellers that sell goods or services into Minnesota from other states must register and begin collecting and remitting Minnesota sales tax no later than October 1, 2018.

Minnesota has a Small Seller Exception, which does not require remote sellers to collect sales tax until their sales during a period of 12 consecutive months total either:

• 100 or more retail sales shipped to Minnesota
• 10 or more retail sales shipped to Minnesota that total more than $100,000

Marketplace Providers
Minnesota law also requires certain Marketplace Providers to collect and remit Minnesota sales tax on all taxable retail sales made into Minnesota facilitated by the marketplace. Remote sellers do not need to collect sales tax when a Marketplace Provider is collecting and remitting.

The Court’s decision in Wayfair also caused Minnesota’s 2017 Marketplace Provider law to become effective.

Marketplace Providers must register and begin collecting Minnesota sales tax on behalf of remote sellers using their marketplace no later than October 1, 2018.

Guidance for sellers
The Minnesota Department of Revenue have updated our Frequently Asked Questions to help sellers outside Minnesota and in Minnesota understand how the Court’s decision affects filing requirements and resources to help collect and file. The agency is updating its fact sheets, industry guides, and information on our website based on the Court’s decision.

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Alexander Korzhen can be reached at akorzhen@taxops.com or 763.703.5713. Follow Alexander on LinkedIn.

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