Minnesota

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The Minnesota Tax Court ruled that a separately stated surcharge covering credit card processing fees was subject to sales tax. The taxpayer, a sole proprietor, operates vacation rental properties that are held out for booking either directly through the taxpayer or through third-party marketers. The taxpayer charges a 4% separately stated surcharge for reservations booked…

The Minnesota Tax Court ruled that the federal Anti-Head Tax Act (AHTA) preempts using Alaska Airlines’ gross receipts when calculating the Minnesota Franchise Tax Minimum Fee. The AHTA prohibits states from taxing gross receipts from air commerce or transportation. Minnesota’s Minimum Fee, imposed on taxpayers exercising a corporate franchise in the state, is calculated based…

The Minnesota Department of Revenue has released updated guidance regarding the state’s requirement that out-of-state marketplace providers collect and remit Minnesota sales tax if their total sales (including facilitated sales) over the prior 12-month period total either 200 or more retail sales shipped to Minnesota, or more than $100,000 in retail sales shipped to Minnesota.…

The Minnesota Department of Revenue updated its fact sheet relating to calculating sales tax for certain discounts, including online deals and cryptocurrency. Specifically, for “Daily Deal Website Vouchers and Coupons,” the fact sheet states that the purchase of the discount voucher is not taxable, but once redeemed, the retailer should charge tax on the amount…

The Minnesota Supreme Court held that the gain from a corporation’s sale of its majority interest in a limited liability company (LLC) was apportionable business income subject to Minnesota corporate income tax. The Court explained that the corporation conducted its business through operating subsidiaries that were owned by the LLC, and that the corporation and…

The Minnesota Supreme Court held that a taxpayer that sold data technology services was not eligible for Minnesota’s sales tax exemption for computer equipment used in online data retrieval systems because the underlying information was “not equally accessible to all of its customers.”

Minnesota provides a sales tax exemption for, among other things, “machinery and…

The Minnesota Supreme Court held that the state’s gross receipts tax on prescription drugs did not violate the Due Process or Commerce Clauses when applied to transactions between out-of-state pharmacies and in-state customers, reversing the Minnesota Tax Court. After concluding that Minnesota’s “legend drug tax” legally applied to the taxpayer under the imposition statute (Minn.…

This is the eleventh edition of the Eversheds Sutherland SALT Scoreboard, and the third edition of 2018. Each quarter, we tally the results of what we deem to be significant taxpayer wins and losses and analyze those results. This edition of the SALT Scoreboard includes a discussion of California combined reporting, insights regarding the Washington…

In two cases, the Minnesota Tax Court clarified the extent to which the Minnesota research and development (R&D) credit is calculated based on the Internal Revenue Code’s defined terms. Minnesota law incorporates the Internal Revenue Code’s definition of “base amount” for purposes of calculating the Minnesota R&D credit. The proportion of qualified research expenditures to…