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Retail Delivery Fee
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Starting July 1, 2024, there will be a Retail Delivery Fee of 50 cents that applies to certain transactions involving retail delivery in Minnesota. (See Minnesota Statutes, Chapter 168E)
The fee applies to each transaction where charges for these items equal or exceed $100:
- Tangible personal property subject to sales tax
- Clothing
When calculating whether a transaction meets or exceeds the $100 threshold, a transaction includes all charges that are part of the sale, not including the Retail Delivery Fee. See Examples below.
The Retail Delivery Fee:
- Is not subject to sales tax if separately stated on the receipt or invoice
- Applies once per transaction, regardless of the number of shipments made
- Is shown as a separate line item on the receipt as “Road Improvement and Food Delivery Fee”
- Follows Minnesota sourcing rules for application
Retailer Exclusions
You are not liable for the Retail Delivery Fee if you are one of the following:
- A retailer, who for the previous calendar year, had Minnesota retail sales that totaled less than $1,000,000
- A marketplace provider facilitating a sale for a retailer, who during the previous calendar year, made Minnesota retail sales through the marketplace that totaled less than $100,000
When calculating the retail sale threshold for the retailer exclusion, include all taxable and nontaxable retail sales. Do not include sales where the purchaser is buying for resale. The purchaser must give you an exemption certificate.
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Charges for the following items are not included when determining if the transaction meets or exceeds the $100 threshold:
- Drugs
- Medical devices, accessories, and supplies
- Food, food ingredients, or prepared food
Certain baby products are exempt from the fee, but some of those products are still subject to sales tax as shown in this table:
| Baby Products Exempt from the Retail Delivery Fee | Subject to Sales Tax |
|---|
| Breast pumps | No |
| Baby bottles and nipples | No |
| Baby swings | Yes |
| Baby wipes | Yes |
| Bottle sterilizers | Yes |
| Car seats and car seat bases | Yes |
| Changing tables and pads | Yes |
| Cribs and bassinets, including mattresses and sheets | Yes |
| Infant eating utensils | Yes |
| Infant syringes | No |
| Pacifiers | No |
| Strollers | Yes |
| Teething rings | No |
The Retail Delivery Fee does not apply to:
- Deliveries to a purchaser that is exempt from sales tax
- Deliveries by motor vehicles with permits issued under Minnesota Statutes, Chapter 169 or 221
- Deliveries by a food and beverage service establishment, whether made by a third party delivery service or the actual establishment
- Purchases picked up at the retailer’s business location, including curbside delivery
- Deliveries to locations outside of Minnesota
Charges for the following items are not included when determining whether a transaction equals or exceeds $100:
- Sales made to retailers for the purpose of resale.
- Utilities, such as natural gas and electricity
- Items delivered electronically (e.g., computer software)
The Retail Delivery Fee is not refundable if any or all items purchased are returned to a retailer or if the retailer provides a refund or credit in the amount equal to or less than the purchase price.
If the retail delivery is canceled by the purchaser, retailer, or delivery provider, the Retail Delivery Fee must be refunded to the purchaser.
We will register retailers for the Retail Delivery Fee taxline. If you are not registered for the taxline, you must log in to your e-Services account and add the Retail Delivery Fee taxline.
For details and instructions on how to do this, see Add Local and Other Taxes to a Sales and Use Tax Return.
You will report the total collected or amount due from the Retail Delivery Fee on the Retail Delivery Fee taxline of your Sales and Use Tax Return.
You may report the total collected or amount due for the Retail Delivery Fee on one return for all business locations. If you do not file or pay this fee on time, you may owe penalties and interest.
Examples
Here are examples of transactions and how the Retail Delivery Fee is calculated.
A customer orders several clothing items for a total of $110. The Retail Delivery Fee applies to the order because charges for clothing are included when calculating whether a transaction meets or exceeds the $100 threshold. The total for the transaction looks like this:
| Item | Charge |
|---|
| T-shirt | $30 |
| Jeans | $70 |
| Socks | $10 |
| Road Improvement and Delivery Fee | $0.50 |
| Total Customer Charge | $110.50 |
A customer orders an $80 baby swing and $20 in baby toys. The Retail Delivery Fee does not apply to this transaction because the $80 baby swing is exempt from the fee, and the $20 in baby toys does not meet or exceed the $100 threshold.
A customer orders $90 worth of board games, and there is a $15 shipping charge. The $15 shipping charge is part of the sales price and included when calculating whether the transaction meets or exceeds the $100 threshold. The charge for this transaction looks like this:
| Item | Charge |
|---|
| Board games | $90 |
| Shipping charge | $15 |
| 6.875% State General Rate Sales Tax on $105 | $7.22 |
| Road Improvement and Delivery Fee | $0.50 |
| Total Customer Charge | $112.72 |
Frequently Asked Questions
Yes. Free shipping does not impact the Retail Delivery Fee.
Follow the sales price definition to determine how to handle discounts and coupons when calculating the $100 threshold. See Sales Price.
The seller is responsible for remitting the Retail Delivery Fee. Direct Pay Permit holders are not authorized to remit the fee directly to Minnesota.
