Minnesota Requires Remote Sellers to Collect Sales Tax Beginning October 1, 2018

The state of Minnesota in a news release announced that it will being enforcing its remote seller sales tax collection statute effective October 1, 2018, as well as its statute requiring certain marketplace providers to collect and remit sales tax.

Minnesota’s de minimis trigger is not the same as South Dakota’s.  A seller must collect and remit Minnesota sales tax once their sales for 12 consecutive months exceeds either:

  • $100,000 in sales and 10 or more individual sales into Minnesota or
  • 100 or more individual sales into Minnesota.

While $100,000 sales trigger is less onerous than South Dakota, since at least 10 separate sales are required in addition to $100,000 in gross revenue from the state, the trigger for the number of individual sales is ½ of the level that the majority opinion commented favorably upon in the Wayfair decision.  Vendors outside the state with less than $100,000 in revenue and between 100 and 200 sales may challenge the statute as violating due process—though the practical problem will be the cost of mounting a challenge vs. the cost of simply going along with the state’s lower trigger level.

Minnesota is a member of Streamlined Sales and Use Tax Agreement, so taxpayers will be able to use the mechanisms of the SSUTA to handle compliance issues.  That includes being able to register with the SSUTA for all affected states, and have access to approved software providers at no cost which, if used by the taxpayers, will also offer audit protection under the rules of the SSUTA.

Information on certified software providers can be found at the Certified Software Provider (CSP) and Certified Automated Systems(CAS) page on the website of the Streamlined Sales and Use Tax Governing Board.