As you probably know Minnesota has had their versions of the Internet tax bill pending for a few months now. The Senate version has had a hearing rescheduled a few times. The committee ran out of time last Thursday after having already been rescheduled at least twice. Earlier in March, the House of Representative version, HF401, was laid over for possible inclusion in the Omnibus Tax Bill.
The latest news from Minnesota is that both the Senate and House bills (essentially identical bills) have been added to the Omnibus Tax bill. SF282, the Senate version, was supposed to have been heard in committee again today before word was announced about the inclusion in the Omnibus Bill.
The Representatives version of the Omnibus bill does indeed include the Internet tax (see article10 section 27).
Solicitor. Defines a “solicitor” as a person who enters into a contract to directly or indirectly refer potential customers to a business or the Web site of the business. States that a business is presumed to have a solicitor in this state, and therefore has a duty to collect the state sales tax, if it has at least $10,000 annually of sales into Minnesota based on referrals from residents of this state or businesses with a physical presence in the state. Provides for a rebuttal of that presumption. Effective beginning with sales made after June 30, 2009.
The vote on the Omnibus Tax bill should occur on Wednesday. An omnibus bill is a group of ammendments which often seems to facilitate passage of some bills. The reason for this is sometimes ammendments seem to sneak by. It can still be removed or changed so it is certainly not a done deal until voted passed and signed.
Since SF282 and HF401 have been added to the Omnibus bill, I do not believe that there will be additional hearings prior to the vote. Minnesota affiliates should make very sure their sites are ready and replacement merchants are lined up. In addition, I suggest that if the Omnibus bill passes with section 1o article 27 intact, affiliates retain a good sales tax attorney to identify possible solutions. I would be happy to give you some suggestions on what to ask and share what we learned in NY last year.