Minnesota Retail Delivery Fee Goes Live

In 2023, the state enacted a new retail delivery fee, assessing a fee of 50¢ per transaction; the new tax was effective starting July 1, 2024. A “retail delivery” is a delivery of taxable tangible personal property or clothing to a person located in Minnesota. The fee applies to each transaction where charges for these items equal or exceed $100. While the new tax does not specifically require delivery via a vehicle and prewritten computer software is considered taxable tangible personal property, it is included as one of the exemptions from the new tax. Specifically, 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

Please note that this is only an overview. For specific guidance, connect with our sales and use tax team here.

H.F. 2887 (2023)