Minnesota Retail Delivery Fee

What is the Minnesota Retail Delivery Fee (RDF)?

Effective July 1, 2024, there will be a Retail Delivery Fee of 50 cents that applies to certain transactions involving retail delivery in Minnesota. The fee applies to each transaction equal to or exceeding $100 that includes: 

  • Tangible personal property subject to sales tax
  • Clothing subject to sales tax

For example, a delivery of a single item priced at $50 would not be subject to the retail delivery fee. But a delivery of three items totaling $150 would have the additional $.50 added. 

In most cases, the item has to be taxable to count toward the $100 before the fee is applied. 

This Retail Delivery Fee is part of a larger initiative aimed to help pay for road maintenance in the state. 

Who is liable for the Minnesota RDF? 

Any retailer, who for the previous calendar year, had Minnesota retail sales that totaled more than $1,000,000. 

Retailers are not liable for the Retail Delivery Fee if they are one of the following:

  • A retailer, who for the previous calendar year, had Minnesota retail sales that totaled less than $1,000,000
  • A marketplace provider facilitating a sale for a retailer, who during the previous calendar year, made Minnesota retail sales through the marketplace that totaled less than $100,000

Is shipping included in the $100 threshold? 

Yes. Shipping charges count toward the $100 threshold. 

For example, if a user sells a $95 item and shipping is $20, then the fee would be applied since the total would be $115, which is over the $100 threshold. 

What if the items in the order are shipped separately? 

The fee would only be added once, even if the items in the order are delivered through multiple shipments.

Are any items exempt from the RDF?

Yes. Charges for the following items are not included when determining if the transaction meets or exceeds the $100 threshold:

  • Drugs
  • Medical devices, accessories, and supplies
  • Food, food ingredients, or prepared food
  • Certain baby products

There are other situations where the RDF does not apply that can be found on the MN DOR.

Is the Minnesota RDF a sales tax?

No. Retail delivery fees are “fees” rather than “taxes”. However, The RDF is subject to sales tax if not separately stated on the receipt or invoice.

Will marketplaces support calculating the Minnesota RDF? 

Marketplaces like Amazon are required, if applicable, to collect and remit the Minnesota retail delivery fee on your behalf once you have totaled more than $100,000 of retail sales in the previous calendar year. We’d recommend reaching out to your specific marketplace platform for more information. 

Does TaxJar support calculating the Minnesota RDF?

TaxJar is focused on supporting sales and use taxes, and we do not have the capability to calculate taxes or fees that fall outside of this schema. This includes the new Minnesota Retail Delivery Fee. If you are liable for this new fee, TaxJar will not be able to calculate it on any of our TaxJar powered integrations. 

If you are using another platform to power your sales tax calculations, we’d recommend reaching out to them to discuss if they will support calculating the new fee.

Will TaxJar support remitting the RDF with your Minnesota AutoFile?  

The Minnesota RDF is reported on the normal sales and use tax return on a new Retail Delivery tax line.

If you are enrolled in TaxJar AutoFile for Minnesota and are required to remit this new fee, we will be able to continue filing your sales tax returns correctly by calculating and adding your potential fee on your return. However, you will need to pay the Retail Delivery Fee amount out-of-pocket if it is not collected on your platforms.The Minnesota DOR provides examples to help you determine the potential fee amounts.

Please feel free to contact our support team at support@taxjar.com if you have any questions.