What Does the Minnesota Economic Nexus Mean?

Joshua Rubin
November 5, 2020

Following the South Dakota v. Wayfair, Inc. decision, nearly every state started updating their nexus tax laws. The Minnesota economic nexus is just one example of a state adjusting to the Supreme Court case, pushing businesses – in particular remote sellers – to adhere to new regulations. Below, we’ve highlighted some of the major aspects to how the Land of 10,000 Lakes is collecting and remitting sales and use tax.

Enforcement date:
October 1, 2018.

Sales/transactions threshold:
$100,000 or 200 transactions.

Measurement period:
Threshold applies to 12 consecutive months.

Included transactions/sales:
Retail sales of tangible personal property delivered into the state.

When You Need to Register Once You Exceed the Threshold:
Remote Sellers do not have to register with the Secretary of State to make taxable retail sales into Minnesota, according to the Minnesota Department of Revenue. But if sellers exceed the Small Seller Exemption, they must register with the DOR to collect and remit Minnesota sales tax. In that case, sellers must register, collect and remit Minnesota sales tax on the first taxable retail sale into Minnesota that occurs no later than 60 days after they exceed the Small Seller Exception.

Summary: Minnesota law requires remote sellers that have made 200 or more retail sales or $100,000 or more in retail sales in Minnesota during the prior 12-month period to collect Minnesota sales tax. Marketplace facilitators that have made or facilitated 200 or more retail sales or $100,000 or more in retail sales in Minnesota during the prior 12-month period must collect Minnesota sales tax.

Minnesota law has adjusted for the Wayfair decision, requiring remote sellers to collect state sales and use tax on their sales into Minnesota. Remote sellers, or businesses that are not sure if they qualify as a remote seller, should stay current on how this could impact their operations.

Minnesota Sales Tax Resources: Contact our team to learn more about the Minnesota economic nexus, and check out our interactive sales tax nexus map for the most up-to-date news on other states.

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Joshua Rubin

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