HF1774

Purpose

This bill would change the retail delivery fee rules in Minnesota by creating exemptions from the fee. Its key focus is to exclude certain types of retail deliveries from being charged the fee, and it specifically names the delivery of aggregate materials as not subject to the fee.

Main Provisions

• Exemptions from the retail delivery fee (the following deliveries would not incur the fee):
  • Deliveries to purchasers who are exempt from tax under chapter 297A.
  • Deliveries of motor vehicles that require a permit issued by the commissioner of transportation or a road authority under chapter 169 or 221, if the retailer keeps books and records showing the delivery was on a qualifying vehicle.
  • Deliveries resulting from a retail sale of food and food ingredients or prepared food.
  • Deliveries resulting from a retail sale by a food and beverage service establishment, regardless of whether a third party performs the delivery.
  • Deliveries resulting from a retail sale of drugs and medical devices, accessories and supplies, or baby products.
  • Deliveries resulting from the delivery of aggregate materials that are subject to sales tax under section 297A.61, subdivision 3, paragraph g, clause 5.
• Documentation requirement for vehicle-related exemption: retailers must maintain books and records through reasonable and verifiable standards to show the delivery was on a qualifying motor vehicle.

Significant Changes to Existing Law

• Expands and clarifies exemptions from the retail delivery fee, notably including the delivery of aggregate materials as exempt.
• Establishes specific categories of exempt deliveries (food, drugs, baby products, vehicle-related deliveries, and exempt purchasers) and a documentation standard for vehicle exemptions.
• Adjusts which deliveries are subject to or exempt from the fee, effectively narrowing the application of the fee to all other retail deliveries not listed in the exemptions.

Implementation Notes (How it works in practice)

• Retailers must determine if a delivery falls into one of the exemption categories and, for vehicle-related exemptions, collect and maintain records demonstrating the vehicle qualification.
• The exemption for aggregate materials aligns with a subset of sales tax rules and may reduce the number of deliveries charged a separate retail delivery fee in transportation funding.

Relevant Terms - retail delivery - retail delivery fee - exempt from tax under chapter 297A - purchaser - motor vehicle - permit issued by the commissioner of transportation - chapter 169 - chapter 221 - books and records - reasonable and verifiable standards - qualifying vehicle - food and food ingredients - prepared food - food and beverage service establishment - third party - drugs and medical devices - accessories and supplies - baby products - aggregate materials - sales tax - section 297A.61 subdivision 3 paragraph g clause 5