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Minnesota Senate Passes "Amazon" Tax Bill

  • May 10, 2012 | Will Frei

UPDATE: 5/11/2012 Tax Analysts reports that a Conference Committee removed the "Amazon" law portion of SF 2391.

The Minnesota Senate passed a bill that will require out-of-state retailers to collect sales tax if they do more than $10,000 in annual sales through in-state referrals.

A large portion of the bill (SF 2391) is dedicated to financing a new stadium for the Minnesota Vikings, which will include funds from the state and funds from local Minneapolis taxes.

Article 6 of the bill amends Minnesota tax, stating explicitly that a retailer who works through an in-state "solicitor" to make sales in Minnesota has nexus in the state. The retailer, therefore, must collect and remit sales tax (if they generate at least $10,000 in revenue through referrals).

The bill defines a solicitor as a Minnesota resident or in-state business ". . . whether an independent contractor or other representative, who directly or indirectly solicits business for the retailer." Solicitation can include posting an online link that drives business to the retailer.

Currently, the bill awaits consideration by a conference committee in order to resolve differences it has with the House version (HF 1485), which did not include "Amazon" type legislation.

Other states have struggled with this type of legislation. For instance, on April 25, an Illinois Circuit Judge ruled a similar law unconstitutional on the grounds that it violated the Commerce Clause of the U.S. Constitution.

If SF 2391 passes, it will go into effect June 30, 2012.

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Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.