The Minnesota Department of Agriculture (MDA) licenses Agricultural Pesticide Dealers who offer for sale or sell agricultural pesticides in or into the state of Minnesota. A sale of an agricultural pesticide by a dealer without a valid Dealer License is a violation of the Minnesota Pesticide Control Law Chapter 18B.316 and may be subject to enforcement action. Agricultural Pesticides are products with Worker Protection Standard labeling as required by 40 CFR Parts 156 and 170. Licensed pesticide dealers who sell restricted use pesticides (RUP) or bulk pesticides do not need to obtain an additional license. Agricultural Pesticide Dealers must assess on invoice and collect fees at sale to end-users, report sales and pay fees associated with agricultural pesticides sales to the Minnesota Department of Agriculture.
The Pesticide Dealer Licensing web page has information about dealer requirements. The department hopes this document provides useful guidance about dealer licenses and the related requirements. If you have additional questions, please use the contact information and resources provided.
Persons selling agricultural pesticide to end-users for use in Minnesota must assess on invoice and collect MN Gross Sales fee at a rate of 0.55% of the sale price, and an ACRRA surcharge at a rate of 0.10% of the sale price. (Note: ACRRA Surcharge rate will increase from 0.10% to 0.30% effective 1/1/2015.) Dealers must collect the fee and surcharge totaling at a rate of 0.65% (Total rate will change to 0.85% effective 1/1/2015.) on the sale price of agricultural pesticides. For example, on an agricultural pesticide sale totaling $1000.00 an additional $6.50 ($8.50 effective 1/1/2015) of fee and surcharge is charged to the end user.
The fee and surcharge must be reflected on the sales invoice. Licensed dealer invoices of agricultural pesticides sold to end-users must show the percentage rate of Minnesota Gross Sales fee assessed, and the calculated amount of MN Gross Sales fee paid.
The MDA recommends the following fee statements on your invoice:
Or you may combined the amounts
No, dealers cannot charge or collect MN Gross Sales Fee or ACRRA Surcharge for non-agricultural pesticides, other products or chemcials, shipping and service fees.
Dealers collect and pay Minnesota Gross Sales fee and ACRRA surcharge for sale of agricultural pesticides only.
No, these rates are stated in Minnesota Pesticide Control Law. Dealers may not set or collect a different percentage rate. The correct percentage rates are:
The phrase “ground water tax” is often still seen on dealer invoices of agricultural pesticides sales. This phrase was coined by the pesticide industry and refers to fees and surcharges. In reality there is no such tax as a ground water tax. MDA recommends removing ground water tax from your invoice statements and replacing it with Minnesota Gross Sales Fee and ACRRA Surcharge. Be sure to include the percentage rate and amount paid on your invoice.
An end-user is a person who actually uses the product. It may be a person who uses the purchased agricultural pesticides for private use, such as a farmer producing an agricultural commodity or anyone using agricultural pesticides for uses in greenhouse, nursery, right-of-way, landscape and forestry etc.
An end-user may also be a person who custom applies pesticides or is a licensed commercial applicator. A licensed commercial applicator that uses pesticides only as an integral part of a pesticide application service is an end-user and does not need to obtain a dealer license.
The fee and surcharge are assessed at the point of sale, the date of the customer invoice.
At point of sale, dealers must make a reasonable and good faith effort to determine where end-users will use the purchased products in or out of the state of Minnesota. Only product used in Minnesota must be assessed the fee and surcharge on agricultural pesticide sales. MDA recognizes that this determination for certain types of sales is problematic.
Pesticide dealers may operate their business in Minnesota but some operate from outside of Minnesota.
Agricultural pesticides sold by a pesticide dealer operating in Minnesota or outside of Minnesota to an end-user in Minnesota or to an end-user who will use the products in the state, are considered sales made in Minnesota.
Dealer-to-dealer sales of agricultural pesticides at a wholesale level, i.e. sales not made to an end-user and agricultural pesticide sold to be used outstate, are exempt from fees and surcharges. Also, products that do not meet the definition of an agricultural pesticide such as non-agricultural pesticides, additives, adjuvant, surfactants, oils, etc. are exempt from the fees.
Dealers must keep records of their purchases, sales, and distribution of agricultural pesticides made in and into Minnesota for a period of five years, including any made from a branch office. All pertinent records need to be available to MDA upon request for audit purposes. An audit program was created to ensure uniform dealer compliance with dealer licensing, sales distribution and payment of Minnesota Gross Sales Fee and ACRRA Surcharges on agricultural pesticide end-user sales. A State auditor is assigned to carry out this program.
Each licensed dealer location must report sales and pay applicable fees by January 31st following the year of sale. MDA will mail out paid and processed renewed pesticide dealer and agricultural pesticide dealer licenses for the next year only after dealers report and pay applicable fee and surcharges on their total annual gross sales of agricultural pesticides. If you have multiple dealer licenses for several locations, each dealer license reports and pays fees for their sales separately. Dealers must also renew their license application and pay license fees before January 31st each year to avoid a late license renewal fee of $75.
Pesticide dealers must be licensed to sell agricultural pesticides. Minnesota Licensed Dealers collect, report, and pay fees associated with the sale of agricultural pesticides. Agricultural Pesticides are defined in the Pesticide Control Law.
The payment of the annual MN Gross Sales fee and ACRRA Surcharge at the end-user level keeps a level regulatory environment for retailers selling agricultural pesticides. Prior to these changes, registrants found it extremely difficult to track their pesticide product sales through the multiple layers of marketplace distribution, and as a result out-of-state pesticide sales of agricultural pesticides into Minnesota did not always include required fees and surcharges. Additionally, in-state licensed dealers operated at a competitive disadvantage to out-of-state dealers, internet brokers, and others who were not licensed.
No. Previously, distributors, manufacturers and registrants invoiced the wholesalers for these same fees, and reported the sales and paid the appropriate fees to the MDA as a condition of the product’s registration in the state. What has changed is that licensed pesticide dealers are now responsible for invoicing these fees to the end-user, reporting sales totals, and paying the fees to the MDA.
No. Since January 1, 2010 suppliers/distributers no longer collect the percent of MN Gross Sales Fee and the ACRRA Surcharge from dealers. Prior to 2010, distributors/suppliers did collect these fees from dealers.
If you have any questions about the information outlined above, please contact, Xia Moua, Licensing & Certification Unit, firstname.lastname@example.org or 651-201-6137, or Nancy Kadoun, MDA Pesticide Distribution Auditor, at email@example.com or 651-201-6188.