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Minnesota won’t expand affiliate nexus standard

  • Sep 1, 2016 | Gail Cole

 Minnesota's affiliate nexus law remains the same.

Minnesota Governor Mark Dayton’s June pocket-veto of an omnibus tax measure means the state’s affiliate nexus standards and marketplace provider and marketplace seller collection obligations will not be expanded.

The measure sought to broaden the definition of affiliate nexus to include a retailer that has or maintains the following:

  • A storage facility in Minnesota
  • Employment of a Minnesota resident who works from a home office
  • A marketplace provider or other third party operating in Minnesota under the authority of the retailer or its subsidiary for any purpose, including facilitating and processing sales

The bill also “adds criteria by which an affiliate entity is deemed to be a related party to the retailer” (bill summary). And a retailer is considered to be represented by a marketplace provider “if the retailer makes sales in this state facilitated by a marketplace provider that maintains a place of business in this state.” “Marketplace provider” is defined as any person who facilitates a retail sale by a retailer by:

  1. Listing or advertising for sale by the retailer (in any forum) taxable tangible personal property, services, or digital goods
  2. Directly or indirectly through agreements or arrangements with third parties collecting payment from the customer and transmitting that payment to the retailer regardless of whether the marketplace provider receives compensation or other consideration in exchange for its services

Additional details are available in the text of H.F. 848.

A special session to continue negotiations on these and other matters was considered; however, Gov. Dayton and legislative leaders announced in mid-August that it would not be held due to disagreement over funds for a SW light rail line (CBS Minnesota).

See the Minnesota Department of Revenue’s Sales Tax Booklet for information about the state’s existing affiliate nexus policy.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.