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Last Updated: 7/25/2018

Update for Marketplace Providers

What is the reason for this update?

On June 21, 2018, the United States Supreme Court issued its decision in South Dakota v. Wayfair overruling its 1992 decision in Quill v. North Dakota. The Court’s decision in Wayfair caused Minnesota’s Marketplace Provider provisions in Minnesota Statutes section 297A.66 to become effective.

Marketplace Providers must register and begin collecting Minnesota sales tax on behalf of remote sellers using their marketplace no later than October 1, 2018.

Who is a Marketplace Provider?

A Marketplace Provider is any person, other than the seller, who facilitates a retail sale by:

  • Listing or advertising the seller’s products; and
  • Processing the payments from the customer, either directly or indirectly through a third party, regardless of whether the Marketplace Provider receives compensation or other consideration in exchange for its services.

When is a Marketplace Provider required to collect and remit sales tax on behalf of remote sellers using their marketplace?

A Marketplace Provider must collect and remit Minnesota sales tax on all taxable sales into Minnesota made by a remote seller through the marketplace unless any of the following are true:

  • The remote seller makes taxable retail sales into Minnesota through the marketplace of less than $10,000 in a 12-month period ending on the most recently completed calendar quarter.
  • The remote seller elects to register and collect Minnesota sales tax directly and does not enter into an agreement with the Marketplace Provider for the marketplace to collect and remit Minnesota sales tax on behalf of the remote seller.
  • The Marketplace Provider does not maintain a place of business in Minnesota.

When is a Marketplace Provider required to collect and remit sales tax on behalf of a Minnesota seller using their marketplace?

A seller physically present in Minnesota should already be collecting and remitting Minnesota sales tax on all taxable sales into Minnesota including sales made by the seller through a marketplace.

Minnesota sellers should continue to collect and remit unless the Minnesota seller enters into an agreement with the Marketplace Provider for the marketplace to collect and remit Minnesota sales tax on behalf of the Minnesota seller.

For more information