Taxable Presence for MinnesotaCare Taxes

You have physical presence in Minnesota and are subject to tax if you, a subsidiary, or an affiliate have a location in the state or a representative that does work for you in the state. You also have physical presence if you own or lease property in Minnesota.

Below are common examples of locations, representatives, and property that establish physical presence in Minnesota.

Locations

Examples of locations in Minnesota include, but are not limited to, the following:

• Heath care facilities, such as clinics, hospitals, or surgical centers
• Offices
• Distribution facilities or retail locations
• Warehouses or storage facilities
• Employee’s home office
• Any other place of business

Representatives

Examples of representatives working for you, a subsidiary, or an affiliate in Minnesota include, but are not limited to, the following:

• Health care providers, such as physicians, nurses, or optometrists
• Employees
• Affiliates or agents
• Salespersons or solicitors
• Independent contractors or other third parties

Representatives include those working in the state, permanently or temporarily, regardless of their purpose. Some examples include, but are not limited to, representatives that:

• Provide patient services
• Solicit orders or process sales for your products or services
• Advertise or promote your business, products, or services, including providing informational materials to customers
• Refer customers to your business through website links
• Assist in providing customer service or resolving customer complaints
• Deliver products into Minnesota by vehicle

Property

Examples of owned or leased property in Minnesota include, but are not limited to, the following:

• Real property, such as land or buildings
• Tangible personal property, such as inventory, equipment, or vehicles

Economic presence in Minnesota only applies to remote sellers. A remote seller is a business that sells its products to customers in a state without having physical presence in that state.  

You have economic presence in Minnesota and are subject to MinnesotaCare taxes if all of the following apply:

• You are a remote seller
• You sell, deliver, or distribute legend drugs, hearing aids and related equipment, or prescription eyewear into Minnesota
• You do not qualify for the Small Seller Exception that applies to you

Minnesota has a Small Seller Exception that does not require remote sellers to file a return and pay tax unless they meet certain thresholds during the calendar year.

Note: If you have physical presence in Minnesota, you are not a remote seller and are not eligible for the Small Seller Exception.

Wholesale Drug Distributor Tax

If you sell or distribute legend drugs at wholesale into Minnesota, you are not required to file and pay Wholesale Drug Distributor Tax unless you meet one or both of these thresholds during a calendar year:

• 200 or more legend drug sales, deliveries, or distributions into Minnesota
• More than $100,000 in gross revenue from the sale, delivery, or distribution of legend drugs into Minnesota

Legend Drug Use Tax

If you sell or distribute legend drugs into Minnesota that are not subject to Wholesale Drug Distributor Tax, you are not required to file and pay Legend Drug Use Tax unless you meet one or both of these thresholds during a calendar year:

• 200 or more legend drug sales, deliveries, or distributions into Minnesota
• More than $100,000 in total price you paid for legend drugs sold, delivered, or distributed into Minnesota (regardless of when you purchased the drugs)

Provider Tax

If you sell or distribute hearing aids and related equipment or prescription eyewear to consumers in Minnesota, you are not required to file and pay Provider Tax unless you 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

When you Meet a Threshold for a Tax

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

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

You need a Minnesota Tax ID Number and a MinnesotaCare tax account to file returns and pay tax.

Minnesota Tax ID Number

You can register either:

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

MinnesotaCare Tax Account

When you register for a Minnesota ID number, you may add a MinnesotaCare tax account at the same time.

If you already have a Minnesota ID number, you can add a MinnesotaCare tax account either:

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