HF 3787

as introduced - 89th Legislature (2015 - 2016) Posted on 04/01/2016 08:22am

A bill for an act
relating to taxation; sales and use; requiring remote sellers without a physical
presence in the state to collect and remit sales and use tax; amending Minnesota
Statutes 2014, section 297A.66, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 297A.66, subdivision 3, is amended to read:

Subd. 3.

Retailer not maintaining place of business in this state.

(a) To the
extent allowed by the United States Constitution and in accordance with the terms and
conditions of federal remote seller law, a retailer making retail sales from outside this state
to a destination within this state and not maintaining a place of business in this state shall
collect sales and use taxes and remit them to the commissioner under section 297A.77.

(b) To the extent allowed by the United States Constitution and the laws of the
United States, A retailer making retail sales from outside this state to a destination within
this state and not maintaining a place of business physical presence in this state shall
collect sales and use taxes and remit them to the commissioner under section 297A.77, if
the retailer meets the following requirements:

(1) the retailer engages in the regular or systematic soliciting of sales from potential
customers in this state by:

(1) (i) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers,
or other written solicitations of business to customers in this state;

(2) (ii) display of advertisements on billboards or other outdoor advertising in this
state;

(3) (iii) advertisements in newspapers published in this state;

(4) (iv) advertisements in trade journals or other periodicals the circulation of which
is primarily within this state;

(5) (v) advertisements in a Minnesota edition of a national or regional publication
or a limited regional edition in which this state is included as part of a broader regional
or national publication which are not placed in other geographically defined editions
of the same issue of the same publication;

(6) (vi) advertisements in regional or national publications in an edition which is not
by its contents geographically targeted to Minnesota but which is sold over the counter
in Minnesota or by subscription to Minnesota residents;

(7) (vii) advertisements broadcast on a radio or television station located in
Minnesota; or

(8) any other solicitation by telegraphy, telephone, computer database, cable, optic,
microwave, or other communication system. (viii) sending, transmitting, or broadcasting
of flyers, newsletters, telephone calls, targeted e-mail, text messages, social media
messages, or targeted mailings;

(ix) collecting, analyzing, and utilizing individual data on purchasers or potential
purchasers in this state;

(x) using information or software, including cached files, cached software, cookies,
or other data-tracking tools, that are stored in or distributed within the state;

(xi) conducting any other actions that use persons, tangible property, intangibles,
digital files or information, or software in the state in an effort to enhance the probability
that a person's contact with a customer in the state will result in a sale to that customer;

(xii) conducting any part of the sale process in the state, regardless of whether that
part of the process has been subcontracted to an affiliate or third party, including listing
products or services for sale, soliciting, branding products, selling products, processing
orders, fulfilling orders, providing customer service, or accepting or assisting with returns
or exchanges. The sale process does not include shipping via a common carrier; or

(xiii) offering its products for sale through one or more marketplaces operated by
any marketplace provider required to collect and remit sales and use taxes in the state
under this section; and

This paragraph must be construed without regard to the state from which distribution
of the materials originated or in which they were prepared.

(c) The location within or without this state of independent vendors that provide
products or services to the retailer in connection with its solicitation of customers within this
state, including such products and services as creation of copy, printing, distribution, and
recording, is not considered in determining whether the retailer is required to collect tax.

(d) A retailer not maintaining a place of business in this state is presumed, subject to
rebuttal, to be engaged in regular solicitation within this state if it engages in any of the
activities in paragraph (b) and:

(1) makes 100 or more retail sales from outside this state to destinations in this state
during a period of 12 consecutive months; or

(2) makes ten or more retail sales during a period of 12 consecutive months, the
retailer:

(i) makes taxable retail sales to 20 or more unique purchasers in this state totaling
in the aggregate more than $100,000 from outside this state to destinations in this state
during a period of 12 consecutive months. $200,000; or

(ii) makes 200 or more taxable retail sales to purchasers in this state.

(b) Notwithstanding section 2, if a federal law is enacted authorizing the state to
impose a requirement to collect and remit sales tax on retailers without a physical presence
in the state, the commissioner must enforce the provisions of this section to the extent
allowed under federal law.

EFFECTIVE DATE.

This section is effective the day following final enactment.
The requirement to remit sales and use tax imposed by the amendments to this subdivision
is not retroactive.

Sec. 2. REMOTE SELLERS; APPEAL AND ENFORCEMENT.

(a) Notwithstanding any other law to the contrary, the Minnesota Supreme Court
shall have original jurisdiction over a claim arising under Minnesota Statutes, section
297A.66, subdivision 3. The Minnesota Supreme Court shall determine all questions of
law and fact and make such orders as will enable it to properly try and determine the
action and render a final judgment.

(b) If a claim challenging the constitutionality of Minnesota Statutes, section
297A.66, subdivision 3, is properly filed, the commissioner must suspend enforcement of
Minnesota Statutes, section 297A.66, subdivision 3, until all appeals are concluded and
final judgment is ordered.

(c) An absence of physical presence in this state by a retailer who voluntarily collects
and remits sales and use tax as required under Minnesota Statutes, section 297A.66,
subdivision 3, is not a factor in determining any refund owed to that retailer, or to a
purchaser from that retailer, under Minnesota Statutes, section 289A.50.

EFFECTIVE DATE.

This section is effective the day following final enactment.