Iowa and Minnesota Enact Laws Expanding the Application of State Sales Taxes.

Jul 1st, 2013

Iowa and Minnesota enacted laws that may increase the number of retailers required to collect state sales and use taxes. These laws went into effect on July 1, 2013.

Iowa has added affiliate nexus provisions to its statutes. These provide that a retailer may be required to collect Iowa sales tax if one of its affiliates does business in Iowa. Retailers maintaining places of business in Iowa are required to collect Iowa sales and use taxes. The new provisions create a presumption that a retailer maintains a place of business in Iowa if a person with substantial nexus in Iowa does business in Iowa as an affiliate of the retailer.

Minnesota's new provisions create a presumption that a retailer has a "solicitor" in Minnesota (and is thus required to collect Minnesota sales and use tax) if the retailer enters into an agreement with a resident to refer potential customers to the retailer. This includes agreements regarding referrals via website links.

Iowa: http://coolice.legis.iowa.gov/linc/85/external/govbills/HF625.pdf

Minnesota: https://www.revisor.mn.gov/laws/?id=143&doctype=Chapter&type=0&year=2013