The expanded physical nexus rules in Minnesota for 2024 significantly impact remote and logistics-based businesses in the following ways:

• Remote Employees: The inclusion of remote employees working from permanent home offices in the nexus criteria means that businesses with such employees in Minnesota are now required to collect and remit sales tax, even if they previously did not have a physical presence in the state.

• Third-Party Logistics Providers: By including third-party logistics providers in the nexus definition, businesses that use external storage or fulfillment services in Minnesota (e.g., Amazon FBA) must recognize a physical presence, obligating them to comply with state sales tax regulations.

• Trade Shows and Pop-up Shops: The clarification that temporary physical presences like trade shows and pop-up shops create nexus requires businesses to collect sales tax if they participate in such events in Minnesota, regardless of the duration.

• Compliance Obligations: Remote and logistics-based businesses must reassess their operations to determine if their activities in Minnesota now establish nexus under the expanded rules. This may involve registering for sales tax, adjusting pricing, and implementing new tax collection processes.

• Increased Administrative Effort: Managing nexus across multiple locations increases the administrative burden, requiring businesses to maintain accurate records, stay updated on compliance requirements, and possibly adjust business strategies to minimize tax liabilities.

• Potential Costs: Complying with expanded nexus rules may lead to additional costs related to tax software, professional services, and potential adjustments in supply chain management to optimize tax obligations.

Overall, the expanded physical nexus rules in Minnesota 2024 require remote and logistics-based businesses to be more vigilant in identifying their tax obligations within the state, leading to more comprehensive compliance efforts and potential adjustments in business operations.