Minnesota to Begin Collecting Direct-to-Consumer Sales Tax Oct. 1, 2018

Update: In 2019 Minnesota amended its remote seller economic nexus law. Effective Oct. 1, 2019 Minnesota’s Small Seller Exception will require remote sellers to collect and remit sales tax if their total sales over the prior 12-month period total either 200 or more retail sales shipped to Minnesota or more than $100,000 in retail sales shipped to Minnesota consumers

The Supreme Court decision in South Dakota v. Wayfair allows states to require remote sellers that have no physical presence in the state to collect and remit sales and use tax on sales delivered to consumers within in their state. As a result of this decision, qualifying wineries making direct-to-consumer shipments into the State of Minnesota will be subject to the state’s new remote seller sales tax collection rules beginning on Oct. 1, 2018. Prior to this change, winery members were not required to pay Minnesota sales or excise taxes on sales shipped to Minnesota consumers.

Under the new rules, remote sellers that have 100 or more retail sales shipped into Minnesota or 10 or more retail sales shipped into Minnesota that total more than $100,000 during a period of 12 consecutive months must register with the Department of Revenue and begin collecting sales tax no later than Oct. 1, 2018. Wineries that fall under this threshold and meet the Small Seller Exception are not required to take any action. The Wayfair decision does not impact the exemption from excise tax on wine shipped from a licensed winery in any state to a Minnesota resident for personal use contained in Section 340A.417 of the Minnesota Statutes.

For more information see the remote seller and marketplace guidance published by the Minnesota Department of Revenue.