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Retail Delivery Fee

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Starting July 1, 2024, there is a Retail Delivery Fee of 50 cents that applies to certain transactions involving retail delivery in Minnesota. Retail delivery means a delivery to a person located in Minnesota of certain items as part of a retail sale. (See Minnesota Statutes, Chapter 168E.)

The fee applies to each transaction where charges for these items equal or exceed $100:

Tangible personal property subject to sales tax
Clothing

Collecting the Fee

The Retail Delivery Fee is a fee on the seller. The seller may either:

Collect and remit the fee from the purchaser
Track and pay the fee themselves

If the seller collects the fee from the purchaser, they must:

Charge the Retail Delivery Fee in addition to any other delivery fee
Show the Retail Delivery Fee and other delivery fees as separate items from the sales price on the purchaser's receipt or invoice
- The fee is not subject to sales tax if stated separately on the receipt or invoice
Name the line item on the receipt as “Road Improvement and Food Delivery Fee”

The Retail Delivery Fee:

Applies once per transaction, regardless of the number of shipments made
Follows Minnesota sourcing rules for application

Retailer Exclusions

You are not liable for the Retail Delivery Fee if you 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

When calculating the retail sale threshold for the retailer exclusion, include all taxable and nontaxable retail sales. Do not include sales where the purchaser is buying for resale. The purchaser must give you an exemption certificate.

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Deliveries Subject to the Fee

The Retail Delivery Fee applies to specific transactions involving a retail delivery, such as:

Deliveries by third-party shippers
Deliveries using couriers
Deliveries using a company vehicle, unless an exemption applies

The Retail Delivery Fee does not apply to:

Deliveries to a purchaser that is exempt from sales tax
Deliveries by motor vehicles with permits issued under Minnesota Statutes, Chapter 169 or 221
Deliveries by a food and beverage service establishment, whether made by a third-party delivery service or the actual establishment (For a definition of food and beverage service establishment, see M.S. 157.15, subd. 5.)
Purchases picked up at the retailer’s business location, including curbside delivery
Deliveries to locations outside of Minnesota

Returns and Cancellations

The Retail Delivery Fee is not refundable if any or all items purchased are returned to a retailer or if the retailer provides a refund or credit in the amount equal to or less than the purchase price.

If the retail delivery is canceled by the purchaser, retailer, or delivery provider, the Retail Delivery Fee must be refunded to the purchaser.

Calculating the $100 Threshold

When calculating whether a transaction meets or exceeds the $100 threshold, a transaction includes all charges that are part of the sales price, not including the Retail Delivery Fee. See Examples below.

Examples [+]

Here are examples of transactions and how the Retail Delivery Fee is calculated.

Clothing Items

A customer orders several clothing items for a total of $110 to be delivered to their home in Minnesota. The Retail Delivery Fee applies to the order because charges for clothing are included when calculating whether a transaction meets or exceeds the $100 threshold. The total for the transaction looks like this:

ITEM	CHARGE
T-shirt	$30
Jeans	$70
Socks	$10
Road Improvement and Food Delivery Fee	$0.50
Total Customer Charge	$110.50

Exempt and Non-Exempt Items

A customer orders an $80 baby swing and $20 in baby toys to be delivered to their home in Minnesota. The Retail Delivery Fee does not apply to this transaction because the $80 baby swing is exempt from the fee, and the $20 in baby toys does not meet or exceed the $100 threshold.

Shipping Charge Included

A customer orders $90 worth of board games to be delivered to their home in Minnesota, and there is a $15 shipping charge. The $15 shipping charge is part of the sales price and included when calculating whether the transaction meets or exceeds the $100 threshold. The charge for this transaction looks like this:

ITEM	CHARGE
Board games	$90
Shipping charge	$15
6.875% State General Rate Sales Tax on $105	$7.22
Road Improvement and Food Delivery Fee	$0.50
Total Customer Charge	$112.72

Items Excluded when Calculating the $100 Threshold

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

Drugs, medical devices, accessories, and supplies
Food, food ingredients, or prepared food
Certain baby products (see Baby Product Exemption)
Items delivered electronically, such as computer software
Utilities delivered through wires or pipes, such as natural gas and electricity
Items purchased for the purpose of resale

Baby Product Exemption [+]

Certain baby products are exempt from the fee, but some of those products are still subject to sales tax as shown in this table:

Baby Products Exempt from the Retail Delivery Fee	Subject to Sales Tax
Breast pumps	No
Baby bottles and nipples	No
Baby swings	Yes
Baby wipes	Yes
Bottle sterilizers	Yes
Car seats and car seat bases	Yes
Changing tables and pads	Yes
Cribs and bassinets, including mattresses and sheets	Yes
Infant eating utensils	Yes
Infant syringes	No
Pacifiers	No
Strollers	Yes
Teething rings	No

Reporting the Fee

You will report the total collected or amount due from the Retail Delivery Fee on the Retail Delivery Fee taxline of your Sales and Use Tax Return.

You may report the total collected or amount due for the Retail Delivery Fee on one return for all business locations. If you do not file or pay this fee on time, you may owe penalties and interest.

Fee Registration

Businesses with active sales tax accounts are now registered for the Retail Delivery Fee taxline. The Retail Delivery Fee taxline will appear on Sales and Use Tax Returns for periods ending after July 1, 2024.

Adding the Retail Delivery Fee Taxline

If you are not registered for the Retail Delivery Fee taxline, you must log in to your e-Services account and add the Retail Delivery Fee taxline. For details and instructions on how to do this, see Add Local and Other Taxes to a Sales and Use Return.

Removing the Retail Delivery Fee Taxline [+]

If you are registered for the Retail Delivery Fee taxline and you do not need to report the fee, you need to log in to your e-Services account to remove the taxline.

To remove the Retail Delivery Fee taxline:

In the Sales & Use Tax panel, select Manage Locations.
Select the Location Code for the location requiring edits.
Select Edit Location.
Make any edits or enter required information in the General Information and Location 2022 NAICS Code sections.
Select Next.
In the Retail Delivery Fee End Date drop-down menu, select the year and month when the fee no longer applies. If you are removing the fee because it does not apply to you, select 2024 – July.
Select Next.
If necessary, add special local or other taxes.
Select Next.
If necessary, add local taxes.
Select Next to review the changes you made.
Select Submit.

Simplified Electronic Returns (SER)

If you are reporting the Retail Delivery Fee on a Simplified Electronic Return (SER), use the FIPS code 80010.

Frequently Asked Questions

As a purchaser, do I owe use tax if the Retail Delivery Fee is not on the invoice? [+]

Does the Retail Delivery Fee apply if the shipping is free? [+]

How do discounts or coupons apply to the $100 threshold? [+]

Who remits the fee when the purchaser has a Direct Pay Permit? [+]

Do I have to collect the fee if I only sell nontaxable clothing? [+]

Does the fee apply to alcoholic beverages sales? [+]

Yes, the Retail Delivery Fee applies to retail delivery sales of alcoholic beverages such as liquor, beer, and wine.

The fee does not apply to sales of alcoholic beverages that are delivered by a food and beverage service establishment, whether made by a third-party delivery service or the actual establishment. (For a definition of food and beverage service establishment, see M.S. 157.15, subd. 5.)

Does the fee apply to recurring deliveries? [+]

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Last Updated

October 08, 2024