Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Minnesota.
December 10, 2025
Minnesota Pass-Through Entity Tax Election Expiring
Authored by: Bonnie Susmano, JD, MBA and Jessie Racioppi
The Minnesota pass-through entity tax election will no longer be available for tax years after December 31, 2025. The pass-through entity tax election is due before the entity’s extended due date. For tax years beginning after December 31, 2025, any payments made by partnerships or S corporations are treated as estimated payments for other entity-level taxes. If the electing entity is a fiscal year filer, the qualifying owner may claim the credit in the corresponding tax year, even on the qualifying owner’s 2026 income tax return. For additional information, please refer to the Department’s website:
If you have any questions about state pass-through entity taxes, please reach out to a member of the Withum SALT Team.
November 3, 2025
Minnesota Updates Guidance on Taxability of Digital Products
Authored by: Bonnie Susmano, JD, MBA and Joe Petrucci
The Minnesota Department of Revenue released updated guidance clarifying the sales and use tax treatment of digital products, including digital goods, digital codes, streamed content, and subscription-based services. The guidance explains when digital items are treated as taxable tangible personal property, when exemptions may apply, and how sourcing rules determine the appropriate tax jurisdiction. It also highlights distinctions between prewritten digital products (generally taxable) and custom or professional service-based deliverables (potentially exempt depending on facts). Businesses that provide or purchase digital content, SaaS access, downloads, or subscriptions should review the guidance to ensure proper tax collection and reporting, particularly for multi-state users and recurring billing models.
If you have questions about the state tax treatment of digital goods and services, please reach out to a member of the Withum SALT Team.
September 3, 2025
Minnesota Retail Delivery Fee Updated
Authored by: Brian Meier, MSA and Penny Sweeting, CPA
Minnesota recently updated its legislation and guidance surrounding the imposition of a 50-cent Retail Delivery Fee on qualifying retail transactions delivered to locations within the state. The fee applies once per transaction when the total sales price—including taxable goods, clothing, and shipping charges—meets or exceeds $100. It must be listed separately on receipts as the “Road Improvement and Food Delivery Fee” and is not subject to sales tax if itemized. Sellers are responsible for remitting the fee, even when shipping is free or the purchaser holds a Direct Pay Permit. The fee also applies to both taxable and nontaxable clothing, alcoholic beverages (unless delivered by a food and beverage service establishment), and recurring deliveries charged per shipment.
Retailers with less than $1 million in Minnesota sales in the prior calendar year, and marketplace providers facilitating under $100,000 in sales, are exempt. Excluded items when calculating the $100 threshold include certain baby products, medical supplies, electronically delivered items, food, fuel, road construction materials, utilities, and resale purchases. The fee is non-refundable for returns, but it must be refunded if the delivery is canceled. Businesses must report the fee on the Retail Delivery Fee tax line of their Sales and Use Tax Return, and those not automatically registered must add the tax line via their e-Services account. This fee supports infrastructure funding while ensuring transparency in retail delivery transactions.
If you have questions about state delivery fees, please reach out to the Withum SALT Team.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
Have Questions or Need Guidance?
For more information on this topic, please contact a member of our team.