Minnesota DOR Explains Solicitor Nexus
- Sales Tax News
- Jun 14, 2013 | Gail Cole
Minnesota Department of Revenue has released an information sheet on Solicitor Nexus.
The notice explains that an out-of-state retailer is presumed to maintain a place of business in Minnesota if:
- It enters into an agreement with a resident for a commission or other substantially similar consideration;
- The resident representative either directly or indirectly solicits business from Minnesota customers to the retailer, through a link on an Internet website or otherwise; and
- In the preceding four quarters, the out-of-state retailer has gross receipts of $10,000 or more.
“Resident” may be a person or a business. “Solicitor” is any person “who directly or indirectly, solicits business to the retailer….” Any out-of-state retailer that solicits sales of taxable tangible personal property or services through any person, independent contractor or employee or other representative, must collect and remit sales tax in Minnesota.
It should be noted that advertising alone does not create a presumption of nexus. However, nexus is presumed if the advertisement is online and includes a link that “directly or indirectly links to the website of the retailer, where the consideration for placing the link on the website is based on the volume of completed sales generated by the link.”
Retailers have the right to “rebut the presumption that it is soliciting sales in Minnesota.” The requirements for rebuttal are explained in the notice.
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