Well, I was all set to write that the Minnesota Senate laid HF2323/SF2074 on the table when I received the following update. The Senate has declared action is urgent and the Omnibus Bill was taken off table. It has now received it’s second and third reading. By declaring it a matter of urgency the steps change slightly and the vote can happen quickly.
The Omnibus Bill will need to be monitored as the Minnesota version of the Internet tax is included. Article 3 Section 2 of SF2074 Substitute (HF2323 Article 10 Section 27) changes the definition of retailer to include solicitors. Under this provision, which closely mimics the NY Internet tax affiliates may create nexus. Although it may be rebutted with provisions that seem similar to the NY Internet tax it is my concern that many merchants will remove affiliates just as happened in NY.
Sec. 2. Minnesota Statutes 2008, section 297A.66, is amended by adding a subdivision to read:
Subd. 4a. Solicitor. (a) “Solicitor,” for purposes of subdivision 1, paragraph
(a), means a person, whether an independent contractor or other representative, who directly or indirectly solicits business for the retailer.
(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement with a resident under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet Web site, or otherwise, to the seller. This paragraph only applies if the total gross receipts from sales to customers located in the state who were referred to the retailer by all residents with this type of agreement with the retailer is at least $10,000 in the 12-month period ending on the last day of the most recent calendar quarter before the calendar quarter in which the sale is made.
(c) The presumption under paragraph (b) may be rebutted by proof that the resident with whom the seller has an agreement did not engage in any solicitation in the state on behalf of the retailer that would satisfy the nexus requirement of the United States Constitution during the 12-month period in question. Nothing in this section shall be construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other representative for purposes of subdivision 1, paragraph (a).
(d) For purposes of this paragraph, “resident” includes an individual who is a resident of this state, as defined in section 290.01, or a business that owns tangible
personal property located in this state or has one or more employees providing services for it in this state.
It is important for everyone to keep a close eye on this. I urge affiliates to be proactive and merchants if it does pass to educate themselves as to the significance of the law before taking action.
Follow the Status of the Omnibus Bill in Minnesota