Remote Sellers of Hearing Aids or Prescription Eyewear

A remote seller is a business that sells it products to customers in a state without having physical presence in that state.

A remote seller subject to Provider Tax sells hearing aids and related equipment or prescription eyewear to consumers in Minnesota.

You must come into compliance starting with the 2020 tax year unless you qualified for the Small Seller Exception for 2020 and expect to qualify for the Small Seller Exception for 2021. The Small Seller Exception is based on sales, deliveries, or distributions into Minnesota during the tax year (January 1 to December 31).

If you do not qualify for the Small Seller Exception for one or both tax years, you need a Minnesota Tax ID Number and a Provider Tax account to be compliant, file returns, and pay tax.

You can register for a Minnesota ID number and a Provider Tax account at the same time, either:

• Online through Business Tax Registration
• By phone at 651-282-5225

If you already have a Minnesota ID number, you can add a Provider Tax account either:

• Online in e-Services by selecting Open a new account under I Want To...
• By phone at 651-282-5225

Note: If you do not have a Minnesota ID number and Provider Tax account, and you qualified for the Small Seller Exception for 2020 and expect to qualify for the Small Seller Exception for 2021, you do not need to register now. If at any time you no longer qualify for the Small Seller Exception, you must register, file a return, and pay tax for that year.

If you are already registered and in compliance, you must continue to file and pay tax each year unless you either:

• Qualify for the Small Seller Exception for a year and notify us by the March 15 filing due date for that year
• No longer make sales into Minnesota

Minnesota has a Small Seller Exception that does not require remote sellers of hearing aids and related equipment or prescription eyewear to file and pay Provider Tax unless they meet one or both of these thresholds during a calendar year:

• 200 or more sales, deliveries, or distributions of the above items into Minnesota
• More than $100,000 in gross revenue from sales, deliveries, or distributions of the above items into Minnesota

Example 1: You are a remote seller who sells hearing aids to consumers in Minnesota. During the calendar year, you receive $90,000 in gross revenue for hearing aids sold to consumers in Minnesota, and you make 100 sales to consumers in the state.

You qualify for the Small Seller Exception for the calendar year and are not subject to Provider Tax because you did not meet or exceed any Small Seller Exception thresholds.

Example 2: You are a remote seller who sells prescription eyewear to consumers in Minnesota. During the calendar year, you receive $150,000 in gross revenue for prescription eyewear sold to consumers in Minnesota, and you make 180 sales to consumers in the state.

You do not qualify for the Small Seller Exception for the calendar year and are subject to Provider Tax because you received more than $100,000 in gross revenue.

When you Meet a Threshold

If you meet either threshold during a year, you do not qualify for the Small Seller Exception for that year. You must file a return and pay tax on all your taxable sales into Minnesota during that year. You must continue to file a return and pay tax each year unless you either:

• Fall below both thresholds for a year and you notify us by the March 15 filing due date for that year
• No longer make sales into Minnesota

Gross revenue you receive from the sale of hearing aids and related equipment or prescription eyewear to consumers in Minnesota is taxable under the Provider Tax.

However, certain revenue you receive may be exempt from the Provider Tax. For more information, see MinnesotaCare Tax Exemptions.

Example: You are a remote seller that sells prescription eyewear through a website to consumers in Minnesota. The gross revenue you receive from the sales to consumers is taxable under the Provider Tax, unless you qualify for the Small Seller Exception or the revenue is exempt.

Yes. Remote sellers may transfer and recover the cost of MinnesotaCare Provider Tax, or the “tax expense,” by passing it through to patients or insurers.

You cannot transfer the tax expense in a deceptive manner or transfer it when no tax is owed.

Yes. We may audit remote sellers like any other business subject to MinnesotaCare taxes. For more information, see MinnesotaCare Tax Audits.

MinnesotaCare tax returns are due annually by March 15 for the previous calendar year. You must file your annual return electronically using our e-Services system. 

You must pay all tax owed by March 15. You are required to pay electronically if you meet certain requirements. You can pay electronically using our e-Services system.

If your total annual tax was more than $500 for the previous year and will be more than $500 for the current year, you must make quarterly estimated tax payments. Estimated tax payments are due April 15, July 15, October 15, and January 15 of the following year.

If a due date falls on a weekend or holiday, your return or payment is due the next business day.

Quarterly estimated tax payments must be the lesser of either:

• One-fourth of your actual tax for the previous year
• 90% of one-fourth of your actual tax for the current year

To calculate the amount you must pay, see the Estimated Tax Instructions for Provider Tax.

The tax rate is 1.8% starting in 2020.