SALT Report 1355 – The Minnesota House of Representatives pre-filed legislation that provides sales and use tax click-through nexus provisions. If enacted, these provisions will become effective June 30, 2012.
Under the pre-filed legislation, a retailer is presumed to have an affiliate in Minnesota if the retailer enters into an agreement with a resident who, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet website or otherwise, to the seller. This provision only applies if the total gross receipts from sales to customers in Minnesota who were referred by residents with this type of agreement is at least $10,000.
Sales must be made during the preceding 12 months ending on the last day of the most recent calendar quarter. A retailer can rebut the presumption above with proof that the resident with whom the seller has an agreement did not solicit sales in Minnesota on behalf of the retailer during the 12-month period in question.
The bill defines the term “solicitor” as a person, whether an independent contractor or other representative, who directly or indirectly solicits business for the retailer. The term “resident” is defined as any individual who resides in Minnesota.
The click-through nexus provision would not apply to income and franchise taxes under Ch. 290 and would not expand or contract the authority to tax a trade or business under Ch. 290.
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