1.1 	A bill for an act
1.2 	relating to government finance; modifying imposition and allocation of certain 
1.3 	taxes; requiring certain tax analysis; requiring transportation funding impacts 
1.4 	analysis; repealing retail delivery fee; providing an unlimited Social Security 
1.5 	subtraction; modifying previous appropriation and transfer; requiring reports; 
1.6 	transferring money; appropriating money;amending Minnesota Statutes 2024, 
1.7 	sections 168.013, subdivision 1m; 168.1287, subdivisions 1, 5; 174.49, subdivisions 
1.8 	2, 3; 270C.15; 290.0132, subdivision 26; 296A.07, subdivision 3; 296A.08, 
1.9 	subdivision 2; 297A.9915, subdivision 4; Laws 2023, chapter 68, article 1, sections 
1.10 	3, subdivision 2, as amended; 20, as amended; repealing Minnesota Statutes 2024, 
1.11 	sections 168E.01; 168E.03; 168E.05; 168E.07; 168E.09.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	Section 1. Minnesota Statutes 2024, section 168.013, subdivision 1m, is amended to read:
1.14 		Subd. 1m.Electric vehicle. (a) In addition to the tax under subdivision 1a, a surcharge 
1.15 	of $75 $150 is imposed for an all-electric vehicle, as defined in section 169.011, subdivision 
1.16 	1a.
1.17 	(b) Notwithstanding subdivision 8, revenue from the fee imposed under this subdivision 
1.18 	must be deposited as follows:
1.19 	(1) 50 percent in the highway user tax distribution fund; and
1.20 	(2) 50 percent in the transportation advancement account under section 174.49.

1.21 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment and 
1.22 	applies to taxes payable for a registration period starting on or after July 1, 2025. Paragraph 
1.23 	(b) is effective August 1, 2025.

2.1 	Sec. 2. Minnesota Statutes 2024, section 168.1287, subdivision 1, is amended to read:
2.2 		Subdivision 1.Issuance of plates. The commissioner must issue blackout special license 
2.3 	plates or a single motorcycle plate to an applicant who:
2.4 	(1) is a registered owner of a passenger automobile, noncommercial one-ton pickup 
2.5 	truck, motorcycle, or recreational vehicle;
2.6 	(2) pays an additional fee in the amount specified for special plates under section 168.12, 
2.7 	subdivision 5;
2.8 	(3) pays the registration tax as required under section 168.013;
2.9 	(4) pays the fees required under this chapter;
2.10 	(5) contributes a minimum of $30 annually to the driver and vehicle services operating 
2.11 	account; and
2.12 	(6) complies with this chapter and rules governing registration of motor vehicles and 
2.13 	licensing of drivers.

2.14 	EFFECTIVE DATE. This section is effective July 1, 2025.

2.15 	Sec. 3. Minnesota Statutes 2024, section 168.1287, subdivision 5, is amended to read:
2.16 		Subd. 5.Contributions; account allocation. Contributions collected under subdivision 
2.17 	1, clause (5), must be deposited in the driver and vehicle services operating account under 
2.18 	section 299A.705 transportation advancement account under section 174.49.

2.19 	EFFECTIVE DATE. This section is effective July 1, 2025.

2.20 	Sec. 4. Minnesota Statutes 2024, section 174.49, subdivision 2, is amended to read:
2.21 		Subd. 2.Transportation advancement account. A transportation advancement account 
2.22 	is established in the special revenue fund. The account consists of funds under sections 
2.23 	168E.09, subdivision 2 168.013, subdivision 1m, 168.1287, and 297A.94, and as provided 
2.24 	by law, and any other money donated, allotted, transferred, or otherwise provided to the 
2.25 	account.

2.26 	EFFECTIVE DATE. This section is effective July 1, 2025.

2.27 	Sec. 5. Minnesota Statutes 2024, section 174.49, subdivision 3, is amended to read:
2.28 		Subd. 3.Distribution. The commissioner must distribute or transfer the funds in the 
2.29 	transportation advancement account as follows:
3.1 	(1) 36 percent to metropolitan counties in the manner provided under subdivision 5;
3.2 	(2) ten (1) 26 percent to the county state-aid highway fund;
3.3 	(3) 15 (2) 23 percent to the larger cities assistance account under section 162.146, 
3.4 	subdivision 1;
3.5 	(4) 27 (3) 35 percent to the small cities assistance account under section 162.145, 
3.6 	subdivision 2; and
3.7 	(5) 11 (4) 16 percent to the town road account under section 162.081; and.
3.8 	(6) one percent to the food delivery support account under section 256.9752, subdivision 
3.9 	1a.

3.10 	EFFECTIVE DATE. This section is effective July 1, 2025.

3.11 	Sec. 6. Minnesota Statutes 2024, section 270C.15, is amended to read:
3.12 	270C.15 REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL 
3.13 	REVENUE FUND.
3.14 	A Revenue Department service and recovery special revenue fund is created for the 
3.15 	purpose of recovering the costs of furnishing government data and related services or 
3.16 	products, as well as recovering costs associated with collecting local taxes on sales and the 
3.17 	retail delivery fee established under chapter 168E. All money collected under this section 
3.18 	is deposited in the Revenue Department service and recovery special revenue fund. Money 
3.19 	in the fund is appropriated to the commissioner to reimburse the department for the costs 
3.20 	incurred in administering the tax law or providing the data, service, or product. Any money 
3.21 	paid to the department as a criminal fine for a violation of state revenue law that is designated 
3.22 	by the court to fund enforcement of state revenue law is appropriated to this fund.

3.23 	EFFECTIVE DATE. This section is effective July 1, 2025.

3.24 	Sec. 7. Minnesota Statutes 2024, section 290.0132, subdivision 26, is amended to read:
3.25 		Subd. 26.Social Security benefits. (a) A taxpayer is allowed a subtraction equal to the 
3.26 	greater of the simplified subtraction allowed under paragraph (b) or the alternate subtraction 
3.27 	determined under paragraph (e).
3.28 	(b) A taxpayer's simplified subtraction equals theThe amount of taxable social security 
3.29 	benefits received is a subtraction, as reduced under paragraphs (c) and (d).
4.1 	(c) For a taxpayer other than a married taxpayer filing a separate return with adjusted 
4.2 	gross income above the phaseout threshold, the simplified subtraction is reduced by ten 
4.3 	percent for each $4,000 of adjusted gross income, or fraction thereof, in excess of the 
4.4 	phaseout threshold. The phaseout threshold equals:
4.5 	(1) $100,000 for a married taxpayer filing a joint return or surviving spouse;
4.6 	(2) $78,000 for a single or head of household taxpayer; and
4.7 	(3) for a married taxpayer filing a separate return, half the amount for a married taxpayer 
4.8 	filing a joint return.
4.9 	(d) For a married taxpayer filing a separate return, the simplified subtraction is reduced 
4.10 	by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of 
4.11 	the phaseout threshold.
4.12 	(e) A taxpayer's alternate subtraction equals the lesser of taxable Social Security benefits 
4.13 	or a maximum subtraction subject to the limits under paragraphs (f), (g), and (h).
4.14 	(f) For married taxpayers filing a joint return and surviving spouses, the maximum 
4.15 	subtraction under paragraph (c) equals $5,840. The maximum subtraction is reduced by 20 
4.16 	percent of provisional income over $88,630. In no case is the subtraction less than zero.
4.17 	(g) For single or head-of-household taxpayers, the maximum subtraction under paragraph 
4.18 	(c) equals $4,560. The maximum subtraction is reduced by 20 percent of provisional income 
4.19 	over $69,250. In no case is the subtraction less than zero.
4.20 	(h) For married taxpayers filing separate returns, the maximum subtraction under 
4.21 	paragraph (c) equals one-half the maximum subtraction for joint returns under paragraph 
4.22 	(f). The maximum subtraction is reduced by 20 percent of provisional income over one-half 
4.23 	the threshold amount specified in paragraph (d). In no case is the subtraction less than zero.
4.24 	(i) For purposes of this subdivision, "provisional income" means modified adjusted gross 
4.25 	income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of the 
4.26 	taxable Social Security benefits received during the taxable year, and "Social Security 
4.27 	benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
4.28 	(j) The commissioner shall adjust the phaseout threshold amounts in paragraphs (c) and 
4.29 	(d) as provided in section 270C.22. The statutory year is taxable year 2023. The maximum 
4.30 	subtraction and threshold amounts as adjusted must be rounded to the nearest $10 amount. 
4.31 	If the amount ends in $5, the amount is rounded up to the nearest $10 amount.
5.1 	(b) For the purposes of this subdivision, "Social Security benefits" has the meaning 
5.2 	given in section 86(d)(1) of the Internal Revenue Code.

5.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
5.4 	31, 2024.

5.5 	Sec. 8. Minnesota Statutes 2024, section 296A.07, subdivision 3, is amended to read:
5.6 		Subd. 3.Rate of tax. (a) Subject to paragraph (b), the gasoline excise tax is imposed at 
5.7 	the following rates:
5.8 	(1) E85 is taxed at the rate of 17.75 cents per gallon;
5.9 	(2) M85 is taxed at the rate of 14.25 cents per gallon; and
5.10 	(3) all other gasoline is taxed at the rate of 25 cents per gallon.
5.11 	(b) Annually On August 1, 2024, the commissioner must determine the tax rate applicable 
5.12 	to the sale of E85, M85, and all other gasoline subject to tax under this section for the 
5.13 	upcoming 12-month period beginning, which begins on January 1, 2025. The adjusted rate 
5.14 	must equal the current rate, multiplied by one plus the percentage increase, if any, in the 
5.15 	Minnesota Highway Construction Cost Index for the reference year. The tax rate must be 
5.16 	rounded to the nearest tenth of a cent. Each of the tax rates for E85, M85, and all other 
5.17 	gasoline must not be lower than the respective rates specified in paragraph (a). Beginning 
5.18 	with the calculation on August 1, 2025, the percentage change in each of the tax rates for 
5.19 	E85, M85, and all other gasoline as a result of the requirements under this paragraph must 
5.20 	not exceed three percent.
5.21 	(c) For purposes of this subdivision:
5.22 	(1) the Minnesota Highway Construction Cost Index is as determined by the 
5.23 	commissioner of transportation; and
5.24 	(2) "reference year" means the 12-month period ending on June 30 two years prior to 
5.25 	the year in which the calculation is made.

5.26 	EFFECTIVE DATE. This section is effective retroactively from August 1, 2024.

5.27 	Sec. 9. Minnesota Statutes 2024, section 296A.08, subdivision 2, is amended to read:
5.28 		Subd. 2.Rate of tax. (a) Subject to paragraph (b), the special fuel excise tax is imposed 
5.29 	at the following rates:
5.30 	(1) liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon;
6.1 	(2) liquefied natural gas is taxed at the rate of 15 cents per gallon;
6.2 	(3) compressed natural gas is taxed at the rate of $1.974 per thousand cubic feet or 25 
6.3 	cents per gasoline equivalent; and
6.4 	(4) all other special fuel is taxed at the same rate as the gasoline excise tax as specified 
6.5 	in section 296A.07, subdivision 2.
6.6 	(b) Annually On August 1, 2024, the commissioner must determine the tax rate applicable 
6.7 	to the sale of E85, M85, and all other gasoline special fuels subject to tax under this section 
6.8 	for the upcoming 12-month period beginning, which begins on January 1, 2025. The rate 
6.9 	must be adjusted as provided in section 296A.07, subdivision 3, paragraph (b). The tax rate 
6.10 	must be rounded to the nearest tenth of a cent. Each of the tax rates for liquefied natural gas 
6.11 	or propane, liquefied natural gas, compressed natural gas, and all other special fuel must 
6.12 	not be lower than the respective rates specified in paragraph (a).
6.13 	(c) The tax is payable in the form and manner prescribed by the commissioner.
6.14 	(d) For purposes of this subdivision, "gasoline equivalent," as defined by the National 
6.15 	Conference on Weights and Measures, is 5.66 pounds of natural gas or 126.67 cubic feet.

6.16 	EFFECTIVE DATE. This section is effective retroactively from August 1, 2024.

6.17 	Sec. 10. Minnesota Statutes 2024, section 297A.9915, subdivision 4, is amended to read:
6.18 		Subd. 4.Deposit. Proceeds of the regional transportation sales tax must be allocated as 
6.19 	follows:
6.20 	(1) 83 74 percent to the Metropolitan Council for the purposes specified under section 
6.21 	473.4465; and
6.22 	(2) 17 26 percent to metropolitan counties, as defined in section 174.49, subdivision 1, 
6.23 	in the manner provided under section 174.49, subdivision 5.

6.24 	EFFECTIVE DATE. This section is effective for taxes remitted after June 30, 2025.

6.25 	Sec. 11. Laws 2023, chapter 68, article 1, section 3, subdivision 2, as amended by Laws 
6.26 	2024, chapter 127, article 1, section 11, is amended to read:

6.286.27
	Subd. 2.Transit System Operations
 		75,654,000
58,654,000
		32,654,000
	
6.29 	This appropriation is for transit system 
6.30 	operations under Minnesota Statutes, sections 
6.31 	473.371 to 473.449.
7.1 	$40,000,000 $23,000,000 in fiscal year 2024 
7.2 	is for a grant to Hennepin County for the Blue 
7.3 	Line light rail transit extension project, 
7.4 	including but not limited to predesign, design, 
7.5 	engineering, environmental analysis and 
7.6 	mitigation, right-of-way acquisition, 
7.7 	construction, and acquisition of rolling stock. 
7.8 	Of this amount, $30,000,000 $13,000,000 is 
7.9 	available only upon entering a full funding 
7.10 	grant agreement with the Federal Transit 
7.11 	Administration by June 30, 2027. This is a 
7.12 	onetime appropriation and is available until 
7.13 	June 30, 2030.
7.14 	$3,000,000 in fiscal year 2024 is for highway 
7.15 	bus rapid transit project development in the 
7.16 	marked U.S. Highway 169 and marked Trunk 
7.17 	Highway 55 corridors, including but not 
7.18 	limited to feasibility study, predesign, design, 
7.19 	engineering, environmental analysis and 
7.20 	remediation, and right-of-way acquisition.

7.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

7.22 	Sec. 12. Laws 2023, chapter 68, article 1, section 20, as amended by Laws 2024, chapter 
7.23 	127, article 1, section 13, is amended to read:
7.24 	Sec. 20. TRANSFERS.
 7.25 	(a) $152,650,000 in fiscal year 2024 is transferred from the general fund to the trunk 
7.26 	highway fund for the state match for highway formula and discretionary grants under the 
7.27 	federal Infrastructure Investment and Jobs Act, Public Law 117-58, and for related state 
7.28 	investments.
7.29 	(b) $19,500,000 in fiscal year 2024 and $19,215,000 in fiscal year 2025 are transferred 
7.30 	from the general fund to the active transportation account under Minnesota Statutes, section 
7.31 	174.38. The base for this transfer is $8,155,000 in fiscal year 2026 and $8,284,000 in fiscal 
7.32 	year 2027.
8.1 	(c) By June 30, 2023, the commissioner of management and budget must transfer any 
8.2 	remaining unappropriated balance, estimated to be $232,000, from the driver services 
8.3 	operating account in the special revenue fund to the driver and vehicle services operating 
8.4 	account under Minnesota Statutes, section 299A.705.
8.5 	(d) By June 30, 2023, the commissioner of management and budget must transfer any 
8.6 	remaining unappropriated balance, estimated to be $13,454,000, from the vehicle services 
8.7 	operating account in the special revenue fund to the driver and vehicle services operating 
8.8 	account under Minnesota Statutes, section 299A.705.

8.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

8.10 	Sec. 13. MOTOR VEHICLE REGISTRATION TAX ANALYSIS.
 8.11 	(a) Using existing resources, the commissioner of public safety must perform an analysis 
8.12 	of the motor vehicle registration tax that includes:
8.13 	(1) a systematic review of the impacts of the current tax structure across vehicle owners 
8.14 	and types of vehicles;
8.15 	(2) a comparison of the tax structure and rates between Minnesota and neighboring 
8.16 	states;
8.17 	(3) analysis of options to adjust the tax for increased comparability and alignment with 
8.18 	neighboring states, which must include examination of fiscal impacts;
8.19 	(4) estimates by state of the annual number of individuals or households that moved to 
8.20 	another state due to the motor vehicle registration tax; and
8.21 	(5) recommendations for adjustments to the tax based on the analysis under clause (3).
8.22 	(b) By January 15, 2026, the commissioner of public safety must submit a report on the 
8.23 	registration tax analysis under paragraph (a) to the chairs and ranking minority members 
8.24 	of the legislative committees with jurisdiction over transportation policy and finance. The 
8.25 	report must comply with Minnesota Statutes, sections 3.195 and 3.197.

8.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

8.27 	Sec. 14. TRANSPORTATION FUNDING IMPACTS ANALYSIS.
 8.28 	(a) The commissioner of transportation must perform an analysis of transportation 
8.29 	funding impacts due to the modifications made in this act. The analysis must include:
9.1 	(1) a summary of the total fiscal impact as a result of the modifications in this act (i) 
9.2 	over the current forecast and planning period, and (ii) projected over the period of the 
9.3 	Minnesota state highway investment plan under Minnesota Statutes, section 174.03, 
9.4 	subdivision 1c;
9.5 	(2) a review of the change in amount of assistance or revenue to each recipient as a result 
9.6 	of the modifications in this act, on an annual basis over the current forecast and planning 
9.7 	period; and
9.8 	(3) determination and identification of specific transportation projects that are delayed 
9.9 	or that no longer have sufficient funds identified as a result of the modifications in this act, 
9.10 	by each recipient over the current forecast and planning period.
9.11 	(b) An entity that is subject to a change in assistance or revenue as a result of the 
9.12 	modifications in this act must provide information as requested by the commissioner to 
9.13 	meet the requirements under this section.
9.14 	(c) For purposes of the transportation funding impacts analysis, modifications in this 
9.15 	act exclude changes related to Minnesota Statutes, chapter 290.
9.16 	(d) By January 15, 2026, the commissioner of transportation must submit a report on 
9.17 	the transportation funding impacts analysis under this section to the chairs and ranking 
9.18 	minority members of the legislative committees with jurisdiction over transportation policy 
9.19 	and finance.

9.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

9.21 	Sec. 15. APPROPRIATION; TRANSPORTATION FUNDING IMPACTS 
9.22 	ANALYSIS.
 9.23 	The amount necessary is appropriated in fiscal year 2026 from the transportation 
9.24 	advancement account in the special revenue fund to the commissioner of transportation for 
9.25 	the transportation funding impacts analysis under section 14. This appropriation applies 
9.26 	prior to the allocation under Minnesota Statutes, section 174.49, subdivision 3.

9.27 	Sec. 16. TRANSFERS; TRANSPORTATION ADVANCEMENT ACCOUNT.
 9.28 	The commissioner of transportation must transfer $13,155,000 in fiscal year 2026 and 
9.29 	$20,284,000 in fiscal year 2027 from the general fund to the transportation advancement 
9.30 	account under Minnesota Statutes, section 174.49. The base for this transfer is $8,284,000 
9.31 	in each of fiscal years 2028 and 2029.

10.1 	EFFECTIVE DATE. This section is effective July 1, 2025.

10.2 	Sec. 17. APPROPRIATIONS GIVEN EFFECT ONCE.
 10.3 	If an appropriation or transfer in this act is enacted more than once during the 2025 
10.4 	regular legislative session, the appropriation or transfer must be given effect once.

10.5 	EFFECTIVE DATE. This section is effective the day following final enactment.

10.6 	Sec. 18. REPEALER.
 10.7 	Minnesota Statutes 2024, sections 168E.01; 168E.03; 168E.05; 168E.07; and 168E.09,
10.8 	are repealed.

10.9 	EFFECTIVE DATE. This section is effective July 1, 2025.

APPENDIX 

Repealed Minnesota Statutes: H0005-2 

168E.01 DEFINITIONS.Subdivision 1.Scope. 
As used in this chapter, the following terms have the meanings given. 

Subd. 2.Accessories and supplies. 
"Accessories and supplies" has the meaning given in section 297A.67, subdivision 7a. 

Subd. 3.Baby products. 
"Baby products" means breast pumps, baby bottles and nipples, pacifiers, teething rings, infant syringes, baby wipes, cribs and bassinets, crib and bassinet mattresses, crib and bassinet sheets, changing tables, changing pads, strollers, car seats and car seat bases, baby swings, bottle sterilizers, and infant eating utensils. 

Subd. 4.Clothing. 
"Clothing" has the meaning given in section 297A.67, subdivision 8. 

Subd. 5.Commissioner. 
"Commissioner" means the commissioner of revenue. 

Subd. 6.Drugs and medical devices. 
"Drugs and medical devices" has the meaning given in section 297A.67, subdivision 7. 

Subd. 7.Food and beverage service establishment. 
"Food and beverage service establishment" has the meaning given in section 157.15, subdivision 5. 

Subd. 8.Food and food ingredients. 
"Food and food ingredients" has the meaning given in section 297A.67, subdivision 2. 

Subd. 9.Marketplace provider. 
"Marketplace provider" has the meaning given in section 297A.66, subdivision 1, paragraph (d). 

Subd. 10.Person. 
"Person" has the meaning given in section 297A.61, subdivision 2. 

Subd. 11.Prepared food. 
"Prepared food" has the meaning given in section 297A.61, subdivision 31. 

Subd. 12.Retail delivery. 
(a) "Retail delivery" means a delivery to a person located in Minnesota of the following items as part of a retail sale: 

(1) tangible personal property that is subject to taxation under chapter 297A; and 

(2) clothing, as defined under section 297A.67, subdivision 8, excluding cloth and disposable child and adult diapers. 

(b) Retail delivery does not include pickup at the retailer's place of business, including curbside delivery. 

Subd. 13.Retail delivery fee. 
"Retail delivery fee" means the fee imposed under section 168E.03 on retail deliveries. 

Subd. 14.Retail sale. 
"Retail sale" has the meaning given in section 297A.61, subdivision 4. 

Subd. 15.Retailer. 
"Retailer" means any person making sales, leases, or rental of personal property or services within or into the state of Minnesota. Retailer includes a: 

(1) retailer maintaining a place of business in this state; 

(2) marketplace provider maintaining a place of business in this state, as defined in section 297A.66, subdivision 1, paragraph (a); 

(3) retailer not maintaining a place of business in this state; and 

(4) marketplace provider not maintaining a place of business in this state, as defined in section 297A.66, subdivision 1, paragraph (b). 

Subd. 16.Tangible personal property. 
"Tangible personal property" has the meaning given in section 297A.61, subdivision 10. 

Subd. 17.Threshold amount. 
"Threshold amount" means $100, before application of the tax imposed under section 297A.62, subdivisions 1 and 1a, and any applicable local sales and use taxes, and excluding exempt items under section 168E.05. 

168E.03 FEE IMPOSED.Subdivision 1.Retail delivery fee imposed. 
(a) A fee is imposed on each retailer equal to 50 cents on each transaction that equals or exceeds the threshold amount involving retail delivery in Minnesota. The retailer may, but is not required to, collect the fee from the purchaser. If separately stated on the invoice, bill of sale, or similar document given to the purchaser, the fee is excluded from the sales price for purposes of the tax imposed under chapter 297A. 

(b) If the retailer collects the fee from the purchaser: 

(1) the retail delivery fee must be charged in addition to any other delivery fee; and 

(2) the retailer must show the total of the retail delivery fee and other delivery fees as separate items and distinct from the sales price and any other taxes or fees imposed on the retail delivery on the purchaser's receipt, invoice, or other bill of sale. The receipt, invoice, or other bill of sale must state the retail delivery fee as "road improvement and food delivery fee." 

Subd. 2.Multiple items or shipments. 
The fee imposed under subdivision 1 is imposed once per transaction regardless of the number of shipments necessary to deliver the items of tangible personal property purchased or of the number of items of tangible personal property purchased. 

Subd. 3.Returns and cancellations. 
The fee imposed under subdivision 1 is nonrefundable if any or all items purchased are returned to a retailer or if the retailer provides a refund or credit in the amount equal to or less than the purchase price. The fee must be refunded to the purchaser if the retail delivery is canceled by the purchaser, retailer, or delivery provider. 

168E.05 EXEMPTIONS.Subdivision 1.Transactions. 
The following retail deliveries are exempt from the fee imposed by this chapter: 

(1) a retail delivery to a purchaser who is exempt from tax under chapter 297A; 

(2) a retail delivery on a motor vehicle for which a permit issued by the commissioner of transportation or a road authority is required under chapter 169 or 221 and the retailer has maintained books and records through reasonable and verifiable standards that the retail delivery was on a qualifying vehicle; 

(3) a retail delivery resulting from a retail sale of food and food ingredients or prepared food; 

(4) a retail delivery resulting from a retail sale by a food and beverage service establishment, regardless of whether the retail delivery is made by a third party other than the food and beverage service establishment; and 

(5) a retail delivery resulting from a retail sale of drugs and medical devices, accessories and supplies, or baby products. 

Subd. 2.Small businesses. 
(a) The fee imposed by this chapter and the requirements of this chapter do not apply to: 

(1) a retailer that made retail sales totaling less than $1,000,000 in the previous calendar year; and 

(2) a marketplace provider when facilitating the sale of a retailer that made retail sales totaling less than $100,000 in the previous calendar year through the marketplace provider. 

(b) A retailer or marketplace provider must begin collecting and remitting the delivery fee to the commissioner on the first day of a calendar month occurring no later than 60 days after the retailer or marketplace provider exceeds a retail sales threshold in paragraph (a). 

168E.07 COLLECTION AND ADMINISTRATION.Subdivision 1.Returns; payment of fees. 
A retailer must report the fee on a return prescribed by the commissioner and must remit the fee with the return. The return and fee must be filed and paid using the filing cycle and due dates provided for taxes imposed under chapter 297A. 

Subd. 2.Collection and remittance. 
A retailer that collects the fee from the purchaser must collect the fee in the same manner as the tax collected under chapter 297A. A retailer using a third-party entity to collect and remit the tax imposed under chapter 297A may elect to have that third-party entity collect and remit the fee imposed under this chapter. 

Subd. 3.Administration. 
Unless specifically provided otherwise by this chapter, the audit, assessment, refund, penalty, interest, enforcement, collection remedies, appeal, and administrative provisions of chapters 270C and 289A, that are applicable to taxes imposed under chapter 297A, apply to the fee imposed under this chapter. 

Subd. 4.Interest on overpayments. 
The commissioner must pay interest on an overpayment refunded or credited to the retailer from the date of payment of the fee until the date the refund is paid or credited. For purposes of this subdivision, the date of payment is the due date of the return or the date of actual payment of the fee, whichever is later. 

168E.09 DEPOSIT OF PROCEEDS.Subdivision 1.Costs deducted. 
The commissioner must retain an amount that does not exceed the total cost of collecting, administering, and enforcing the retail delivery fee and must deposit the amount in the revenue department service and recovery special revenue fund. 

Subd. 2.Deposits. 
After deposits under subdivision 1, the commissioner must deposit the balance of proceeds from the retail delivery fee in the transportation advancement account under section 174.49.