1.1 A bill for an act
1.2 relating to transportation; imposing a fee on the delivery of tangible personal
1.3 property; allocating funds; amending Minnesota Statutes 2022, sections 270C.15;
1.4 297A.61, subdivision 7; proposing coding for new law as Minnesota Statutes,
1.5 chapter 168E.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [168E.01] DEFINITIONS.
1.8 Subdivision 1.Scope.As used in this chapter, the following terms have the meanings
1.9given.
1.10 Subd. 2.Clothing."Clothing" has the meaning given in section 297A.67, subdivision
1.118.
1.12 Subd. 3.Commissioner."Commissioner" means the commissioner of revenue.
1.13 Subd. 4.Motor vehicle."Motor vehicle" has the meaning given in section 168.002,
1.14subdivision 18.
1.15 Subd. 5.Retail delivery."Retail delivery" means a retail sale of tangible personal
1.16property by a retailer for delivery by a motor vehicle to the purchaser at a location in
1.17Minnesota in which the sale contains at least one item of tangible personal property that is
1.18subject to taxation under chapter 297A, including the retail sale of clothing notwithstanding
1.19the exemption from taxation for clothing under chapter 297A.
1.20 Subd. 6.Retail delivery fee."Retail delivery fee" means the fee imposed under section
1.21168E.03 on retail deliveries.
1Section 1.
REVISOR EAP/AD 23-0201401/17/23
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 580
NINETY-THIRD SESSION
Authored by Koegel and Hornstein01/19/2023
The bill was read for the first time and referred to the Committee on Transportation Finance and Policy 2.1 Subd. 7.Retail sale."Retail sale" has the meaning given in section 297A.61, subdivision
2.24.
2.3 Subd. 8.Retailer."Retailer" means any person making sales, leases, or rental of personal
2.4property or services within or into the state of Minnesota. Retailer includes a:
2.5 (1) retailer maintaining a place of business in this state;
2.6 (2) marketplace provider maintaining a place of business in this state, as defined in
2.7section 297A.66, subdivision 1, paragraph (a);
2.8 (3) retailer not maintaining a place of business in this state; and
2.9 (4) marketplace provider not maintaining a place of business in this state, as defined in
2.10section 297A.66, subdivision 1, paragraph (b).
2.11 Subd. 9.Tangible personal property."Tangible personal property" has the meaning
2.12given in section 297A.61, subdivision 10.
2.13 EFFECTIVE DATE.This section is effective January 1, 2024.
2.14 Sec. 2. [168E.03] FEE IMPOSED.
2.15 Subdivision 1.Rate.(a) A retailer who makes a retail delivery shall add to the price of
2.16the retail delivery a retail delivery fee to be collected from the purchaser. The retailer must
2.17remit the fee to the commissioner in the time and manner prescribed by the commissioner
2.18in accordance with this chapter.
2.19 (b) Beginning on January 1, 2024, through June 30, 2025, the retail delivery fee equals
2.20$0.40 per retail delivery. Beginning on July 1, 2025, through June 30, 2027, the retail
2.21delivery fee equals $0.45 per retail delivery. Beginning on July 1, 2027, and thereafter; the
2.22retail delivery fee equals $0.50 per retail delivery.
2.23 (c) The retail delivery fee must not be included in the sales price for purposes of
2.24calculating tax owed under chapter 297A.
2.25 (d) The retail delivery fee must be charged in addition to any other delivery fee. The
2.26retailer must show the total of the retail delivery fee and other delivery fees as separate
2.27items and distinct from the sales price and any other taxes or fees imposed on the retail
2.28delivery on the purchaser's receipt, invoice, or other bill of sale.
2.29 Subd. 2.Delivery.Each retail sale is a single retail delivery regardless of the number
2.30of shipments necessary to deliver the items of tangible personal property purchased.
2.31 EFFECTIVE DATE.This section is effective January 1, 2024.
2Sec. 2.
REVISOR EAP/AD 23-0201401/17/23 3.1 Sec. 3. [168E.05] EXEMPTIONS.
3.2 Subdivision 1.Certain transactions.A retail delivery that includes only tangible personal
3.3property that is exempt from taxation under chapter 297A, except tangible personal property
3.4that is exempt as clothing under chapter 297A, is exempt from the retail delivery fee.
3.5 Subd. 2.Certain entities.A purchaser who is exempt from tax under chapter 297A is
3.6exempt from the retail delivery fee.
3.7 EFFECTIVE DATE.This section is effective January 1, 2024.
3.8 Sec. 4. [168E.07] COLLECTION AND ADMINISTRATION.
3.9 Subdivision 1.Returns; payment of fees.A retailer must report the fee on a return
3.10prescribed by the commissioner and must remit the fee with the return. The return and fee
3.11must be filed and paid using the filing cycle and due dates provided for taxes imposed under
3.12chapter 297A.
3.13 Subd. 2.Administration.Unless specifically provided otherwise by this section, the
3.14audit, assessment, refund, penalty, interest, enforcement, collection remedies, appeal, and
3.15administrative provisions of chapters 270C and 289A, that are applicable to taxes imposed
3.16under chapter 297A, apply to the fee imposed under this chapter.
3.17 Subd. 3.Interest on overpayments.The commissioner must pay interest on an
3.18overpayment refunded or credited to the retailer from the date of payment of the fee until
3.19the date the refund is paid or credited. For purposes of this subdivision, the date of payment
3.20is the due date of the return or the date of actual payment of the fee, whichever is later.
3.21 EFFECTIVE DATE.This section is effective January 1, 2024.
3.22 Sec. 5. [168E.09] DEPOSIT OF PROCEEDS.
3.23 Subdivision 1.Costs deducted.The commissioner shall retain an amount that does not
3.24exceed the total cost of collecting, administering, and enforcing the retail delivery fee and
3.25shall deposit the amount in the revenue department service and recovery special revenue
3.26fund.
3.27 Subd. 2.Deposits.The balance of proceeds shall be deposited as follows:
3.28 (1) 60 percent must be deposited in the highway user tax distribution fund;
3.29 (2) 36 percent must be deposited in the metropolitan area transit account under section
3.3016A.88; and
3Sec. 5.
REVISOR EAP/AD 23-0201401/17/23 4.1 (3) four percent must be deposited in the greater Minnesota transit account under section
4.216A.88.
4.3 EFFECTIVE DATE.This section is effective January 1, 2024.
4.4 Sec. 6. Minnesota Statutes 2022, section 270C.15, is amended to read:
4.5 270C.15 REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL
4.6REVENUE FUND.
4.7 A Revenue Department service and recovery special revenue fund is created for the
4.8purpose of recovering the costs of furnishing government data and related services or
4.9products, as well as recovering costs associated with collecting local taxes on sales and the
4.10retail delivery fee established under chapter 168E. All money collected under this section
4.11is deposited in the Revenue Department service and recovery special revenue fund. Money
4.12in the fund is appropriated to the commissioner to reimburse the department for the costs
4.13incurred in administering the tax law or providing the data, service, or product. Any money
4.14paid to the department as a criminal fine for a violation of state revenue law that is designated
4.15by the court to fund enforcement of state revenue law is appropriated to this fund.
4.16 EFFECTIVE DATE.This section is effective January 1, 2024.
4.17 Sec. 7. Minnesota Statutes 2022, section 297A.61, subdivision 7, is amended to read:
4.18 Subd. 7.Sales price.(a) "Sales price" means the measure subject to sales tax, and means
4.19the total amount of consideration, including cash, credit, personal property, and services,
4.20for which personal property or services are sold, leased, or rented, valued in money, whether
4.21received in money or otherwise, without any deduction for the following:
4.22 (1) the seller's cost of the property sold;
4.23 (2) the cost of materials used, labor or service cost, interest, losses, all costs of
4.24transportation to the seller, all taxes imposed on the seller, and any other expenses of the
4.25seller;
4.26 (3) charges by the seller for any services necessary to complete the sale, other than
4.27delivery and installation charges;
4.28 (4) delivery charges, except (i) the percentage of the delivery charge allocated to delivery
4.29of tax exempt property, when the delivery charge is allocated by using either (i) (A) a
4.30percentage based on the total sales price of the taxable property compared to the total sales
4.31price of all property in the shipment, or (ii) (B) a percentage based on the total weight of
4Sec. 7.
REVISOR EAP/AD 23-0201401/17/23 5.1the taxable property compared to the total weight of all property in the shipment, and (ii)
5.2the retail delivery fee imposed under chapter 168E; and
5.3 (5) installation charges.
5.4 (b) Sales price does not include:
5.5 (1) discounts, including cash, terms, or coupons, that are not reimbursed by a third party
5.6and that are allowed by the seller and taken by a purchaser on a sale;
5.7 (2) interest, financing, and carrying charges from credit extended on the sale of personal
5.8property or services, if the amount is separately stated on the invoice, bill of sale, or similar
5.9document given to the purchaser; and
5.10 (3) any taxes legally imposed directly on the consumer that are separately stated on the
5.11invoice, bill of sale, or similar document given to the purchaser.
5.12 (c) Sales price includes consideration received by the seller from third parties if:
5.13 (1) the seller actually receives consideration from a party other than the purchaser and
5.14the consideration is directly related to a price reduction or discount on the sale;
5.15 (2) the seller has an obligation to pass the price reduction or discount through to the
5.16purchaser;
5.17 (3) the amount of the consideration attributable to the sale is fixed and determinable by
5.18the seller at the time of the sale of the item to the purchaser; and
5.19 (4) one of the following criteria is met:
5.20 (i) the purchaser presents a coupon, certificate, or other documentation to the seller to
5.21claim a price reduction or discount when the coupon, certificate, or documentation is
5.22authorized, distributed, or granted by a third party with the understanding that the third party
5.23will reimburse any seller to whom the coupon, certificate, or documentation is presented;
5.24 (ii) the purchaser identifies himself or herself to the seller as a member of a group or
5.25organization entitled to a price reduction or discount. A "preferred customer" card that is
5.26available to any customer does not constitute membership in such a group; or
5.27 (iii) the price reduction or discount is identified as a third-party price reduction or discount
5.28on the invoice received by the purchaser or on a coupon, certificate, or other documentation
5.29presented by the purchaser.
5.30 EFFECTIVE DATE.This section is effective January 1, 2024.
5Sec. 7.
REVISOR EAP/AD 23-0201401/17/23