Minnesota Law Adds Fee to Retail DeliveriesMinnesota Law Adds Fee to Retail Deliveries Effective July 1, 2024, a new law in Minnesota has introduced a fee on certain retail deliveries. The fee is part of an effort to boost transportation funding and is expected to generate around $200 million in the first four years. What Deliveries Are Affected? The Retail Delivery Fee applies to deliveries made within Minnesota that are subject to the general state sales tax and include apparel, as long as the cost of the items equals or exceeds $100. This fee is added once per transaction, regardless of the number of shipments. Types of Deliveries Subject to the Fee: * Deliveries by external carriers * Deliveries via couriers * Deliveries with a commercial vehicle (unless an exemption applies) Types of Deliveries Exempt from the Fee: * Deliveries to buyers exempt from Minnesota sales tax * Deliveries by certain vehicles and catering establishments * Curbside pickups * Deliveries outside of Minnesota Items Excluded from the Fee Threshold: * Medicines, medical devices, and supplies * Food and prepared food * Certain baby products (e.g., breast pumps, bottles) * Digitally delivered items * Utilities supplied through cables or pipes * Items purchased for resale Who Pays the Fee? The fee is primarily aimed at larger businesses with retail sales exceeding $1 million in the preceding calendar year. What This Means for You If you order items online or have them delivered, you may see an additional 50-cent fee on qualifying purchases. This fee is meant to support transportation infrastructure and improve safety.
On Monday, July 1, several new laws went into effect in Minnesota. One of them is causing quite a stir in the state, as it has a direct impact on the wallets of many Minnesotans.
It’s now commonplace to order things to be delivered directly to your door, thanks to Amazon and countless other retailers. Recently, Minnesota lawmakers tried to capitalize on this by creating a law that would add a fee to qualifying deliveries made within the state.
That law went into effect on July 1, 2024, and revenue from the additional fee will be used to boost transportation funding. The fee is expected to generate about $200 million in the first four years, according to estimates.
The big questions are which deliveries will have additional charges, how much more Minnesotans will pay, and what this means for you.
Minnesota’s New Retail Delivery Rate
The new Retail Delivery Fee adds 50 cents to certain retail delivery transactions in Minnesota. The fee is applied to anything subject to the general state sales tax and apparel.
According to the Minnesota Revenue Service, “retail delivery” means delivery to a person in Minnesota of certain items as part of a retail sale. The fee applies to any transaction in which the cost of those items equals or exceeds $100.
When calculating whether a transaction meets or exceeds the $100 threshold, all charges that are part of the sale price, except for delivery charges, are taken into account.
The fee is added once per transaction, regardless of the number of shipments. So, for example, if you place an order on Amazon that is $100 or more, you will pay the Minnesota fee once for that order, regardless of the number of trips or the number of boxes it takes Amazon to complete the transaction.
Do shipping charges apply to every delivery in Minnesota?
No, not all deliveries are affected by the new law. The Retail Delivery Fee applies to specific transactions involving a retail delivery, such as:
- Deliveries by external carriers
- Deliveries via couriers
- Deliveries with a commercial vehicle, unless an exemption applies
The delivery costs do not apply to:
- Deliveries to a buyer who is exempt from VAT
- Deliveries by motor vehicles with permits issued under Minnesota Statutes, Chapter 169 or 221
- Deliveries by a catering establishment, regardless of whether they are made by an external delivery service or by the actual establishment
- Purchases collected at the retailer’s location, including curbside delivery
- Deliveries to locations outside of Minnesota
Items and businesses excluded from retail delivery charges
Not everything you buy can get the new fee. The following items will not be taken into account when determining whether a transaction meets or exceeds the $100 threshold:
- Medicines, medical devices, accessories and supplies
- Food, food ingredients or prepared food
- Certain baby products include breast pumps, bottles and teats, syringes, pacifiers and teething rings. Other baby products such as changing tables, car seats, baby wipes and cribs are not exempt.
- Items delivered electronically, such as computer software
- Utilities supplied through cables or pipes, such as natural gas and electricity
Items purchased for resale
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Additionally, the Retail Delivery Fee is primarily targeted at larger businesses. The fee does not apply to retailers with less than $1,000,000 in retail sales in the preceding calendar year.
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