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Wayfair Comes to Minnesota

Minnesota has enacted post-Wayfair legislation requiring remote sellers to register with the state and collect Minnesota sales taxes beginning 10/1/2018.   

Like Wisconsin’s post-Wayfair sales tax rule, Minnesota’s rule exempts certain remote sellers from collecting and remitting sales tax. Remote sellers are not required to register to collect sales tax until their sales during a period of 12 consecutive months total either: (i) 100 or more orders of retail goods shipped into Minnesota, or (ii) 10 or more orders of retail goods shipped into Minnesota with a total value exceeding $100,000. Additionally, remote sellers who only make taxable sales into Minnesota through a marketplace where the marketplace collects and remits Minnesota sales tax on the remote seller’s behalf do not need to register and collect sales tax. Note, however, that if a remote seller sells through a marketplace that does not collect Minnesota sales tax on that seller’s behalf, the remote seller must collect Minnesota sales tax on its taxable sales unless it meets the small seller exception.

If you sell goods/services subject to sales tax to customers in Minnesota and do not fall within either of the exceptions above, you will need to register with the Minnesota Department of Revenue as soon as possible and begin collecting and remitting sales tax starting on 10/1/2018.  See http://www.revenue.state.mn.us/Forms_and_Instructions/abr_inst.pdf for additional information on the registration process.  

You should also review your current invoice terms and conditions, agreements, and other documents that might refer to sales tax, and update them as necessary to reflect your obligation to collect and remit Minnesota sales tax.

You can find more information on Minnesota’s taxation of remote sellers here.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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