The 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 Code of Federal Regulations Title 40 (Part 156 and Part 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 & Sales Reporting 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.
What is the agricultural pesticide sales fee and surcharge?
Persons selling agricultural pesticide to end-users for use in Minnesota must assess on invoice and collect Minnesota Gross Sales fee at a rate of 0.55% of the sale price, and an ACRRA surcharge at a rate of 0.48% of the sale price. (Note: ACRRA Surcharge assessed fees increased, effective 1/1/2023.) Dealers must collect the fee and surcharge totaling at a rate of 1.03% on the sale price of agricultural pesticides. For example, on an agricultural pesticide sale totaling $1,000.00 an additional $10.30 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 Minnesota Gross Sales fee paid.
How do I state fees and surcharges on invoice?
The MDA recommends the following fee statements on your invoice:
- Minnesota Gross Sales Fee rate 0.55% / ACRRA Surcharge rate 0.48% = 1.03% (Note: The Minnesota Gross Sales Fee rate and ACRRA Surcharge rate increased, effective 1/1/2023.)
Or you may combine the amounts
- Minnesota Gross Sales Fee/ACRRA Surcharge rate 1.03%
Can dealers charge the Minnesota Gross Sales fee and ACRRA surcharge on non-agricultural pesticide or other products sold?
No, dealers cannot charge or collect Minnesota Gross Sales Fee or ACRRA Surcharge for non-agricultural pesticides, other products or chemicals, shipping and service fees.
Dealers collect and pay Minnesota Gross Sales fee and ACRRA surcharge for sale of agricultural pesticides only.
Can dealers set and collect a different percentage rate for the Minnesota Gross Sales fee or ACRRA surcharge?
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:
- Minnesota Gross Sales Fee rate is 0.55%
- ACRRA Surcharge rate is 0.48% (Note: ACRRA Surcharge assessed fees increased, effective 1/1/2023.)
What is ground water tax?
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. The 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.
Who is an end-user?
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.
When are end-users assessed for these fees and surcharges?
The fee and surcharge are assessed at the point of sale, the date of the customer invoice.
What are the dealer’s responsibilities to identify sales made in or into Minnesota?
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. The MDA recognizes that this determination for certain types of sales is problematic.
What is meant by agricultural pesticides sales made in or into Minnesota?
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.
Are there sales and products that are exempt from these fees?
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.
What are pesticide dealer responsibilities to track the sales of agricultural pesticides that they make?
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 the 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.
When do pesticide dealers report their total sales and pay annual fees and surcharges of agricultural pesticides?
Each licensed dealer location must report sales and pay applicable fees by January 31st following the year of sale. The 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.
What are the regulatory changes made on January 1, 2010 related to agricultural pesticide sales?
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.
Why were fee collection and payment changes made in 2010?
The payment of the annual Minnesota 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.
Are the Minnesota Annual Gross Sales fee and ACRRA surcharges new fees?
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.
Do suppliers or distributors of agricultural pesticides charge dealers for these fees?
No. Since January 1, 2010 suppliers/distributers no longer collect the percent of Minnesota Gross Sales Fee and the ACRRA Surcharge from dealers. Prior to 2010, distributors/suppliers did collect these fees from dealers.