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May 30, 2023

Minnesota enacts new retail delivery fee set to take effect in July 2024

On May 24, 2023, Minnesota Governor Tim Walz signed the transportation finance and policy bill (HF 2887), which, among other things, establishes a new fee on retail deliveries1 in the state. Effective July 1, 2024, retailers (including out-of-state retailers and marketplace providers) are subject to a $0.50 fee on each transaction that is $100 or more and involves a retail delivery in Minnesota. The fee applies once per transaction, regardless of the number of shipments needed to deliver the purchased items.

Retailers can either directly pay the fee or collect it from the purchaser. The fee is excluded from the sales price when it is separately stated on the invoice, bill of sale or similar document. If the retail delivery fee is collected from the purchaser, it must be charged in addition to any other delivery fee. Further, the purchaser's receipt, invoice or other bill of sale must (1) list the total of these fees separately from the sales price and any other taxes and fees imposed on the retail delivery, and (2) state the retail delivery fee as "road improvement and food delivery fee."

The retail delivery fee is nonrefundable if the purchased items are returned to the retailer or if the retailer provides a refund or credit. The fee, however, must be refunded if the purchaser, retailer or delivery provider cancels the retail delivery.

The retail delivery fee does not apply to retail deliveries:

  • Made to a purchaser exempt from sales and use tax
  • Made using a qualifying motor vehicle
  • Resulting from a retail sale
    • Of food and food ingredients or prepared food
    • By a food or beverage service establishment (regardless of whether the delivery is made by a third party)
    • Of drugs and medical devices, accessories and supplies, or baby products

The law also exempts small businesses from having to pay the fee. For purposes of this exemption, a small business is a retailer with retail sales of less than $1 million in the prior calendar year or a marketplace provider that facilitated retail sales of less than $100,000 in the prior calendar year. Small businesses exceeding one of those thresholds must begin collecting and remitting the delivery fee on the first day of the calendar month occurring no later than 60 days after the threshold is exceeded.

The fee must be reported on, and remitted with, a return prescribed by the commissioner, according to the sales-and-use-tax filing cycle and due dates.


While Minnesota's new retail delivery fee doesn't take effect until July 1, 2024, retailers and marketplace providers making deliveries of tangible personal property to customers located in Minnesota will need to evaluate whether to directly pay the fee or to collect it from purchasers. While the law allows retailers to simply pay the fee, the fact remains that the option will either become a new cost of doing business or require retailers to raise their prices to offset the fee.


Contact Information
For additional information concerning this Alert, please contact:
State and Local Taxation Group
   • Bryan Sylvester (

Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor



1 A "retail delivery" includes deliveries of taxable tangible personal property and clothing (excluding cloth and disposable diapers) to a person in Minnesota; but does not include picking up items from a retailer's place of business, such as curbside delivery.