Minnesota's Response to Wayfair Supreme Court Decision
July 25, 2018 — Minnesota Revenue has updated their local sales tax collection requirements for Minnesota Sellers. Due to the U.S. Supreme Court’s decision on South Dakota v. Wayfair, physical presence is no longer needed for a state to require a company to collect their sales tax. Minnesota is now changing their long-time policy that local taxes only need to be collected if the company has a physical presence or nexus in the jurisdictions.
Starting October 1, 2018, Minnesota will require the collection of all local taxes if a seller has a filing requirement with the State of Minnesota.
Link to the Minnesota Notice https://content.govdelivery.com/accounts/MNREV/bulletins/20b9085
Recently, the Supreme Court passed down a decision on South Dakota v. Wayfair.
It was ruled that states can require remote sellers to collect and remit sales tax with no physical presence. For Minnesota purposes, a remote seller is a retailer not maintaining a place of business in this state.
Each state determines their own threshold and transaction amounts at which a collection requirement applies and Minnesota has now decided to come out with a decision in response to the Wayfair ruling.
Starting October 1st, 2018, Minnesota will require remote sellers to first register, and then collect sales tax unless they meet a small seller exception as defined below. The small seller exception is more aggressive than the Wayfair case and only requires either of following in a 12 month period:
- 100 or more retail sales shipped to Minnesota
- 10 or more retail sales shipped to Minnesota that total more than $100,000
You can click here to access an FAQ from the Minnesota Department of Revenue that may help to clarify some high-level questions you may have, including around topics like who is classified as a remote seller, information about Streamlined Sales Tax, and resources around registering to collect Minnesota sales tax.
If you have other questions about state and local taxation, you can reach out to Jared Weiskopf, Redpath’s State and Local Tax Service Area Leader today.
Jared Weiskopf, CPA
Jared Weiskopf is a partner in the business tax service area and is the state and local taxation service area leader. He assists clients with corporate and partnership tax preparation, tax planning and research, and works with a variety of clients in industries such as manufacturing and professional services. Jared has provided public accounting services at Redpath and Company since 1997.
SUBSCRIBE TO REDPATH INSIGHTS
You Can Search by Tag
- Accounting services
- BottomLine Newsletter
- Business Growth
- Business Valuation
- Construction and Real Estate
- Corporate Development
- Employee Benefits
- Employee Engagement
- Estate, Gift, and Trust
- Financing M&A
- Mergers and Acquisitions
- Outsourced Accounting
- Paycheck Protection Program
- Performance Optimization
- Private Equity
- Sales Tax
- Sales Tax Rebate
- State and Local Tax
- Succession Planning
- Tax Credits
- Tax Planning Strategies
- Tax Reform
- Transaction Services
- Variable Interest Entity (VIE)
- Wealth Transfer