Minnesota has quietly rewritten the rules — without ever publicly vetting the changes in the House or Senate tax committees. Language that undermines the taxpayer-friendly Dakota Drug win at the Minnesota Supreme Court was never publicly vetted in the tax committees.
That decision had shielded wholesalers from MinnesotaCare Tax on rebate amounts, recognizing those dollars were never truly "received." Now, for gross receipts received after June 30, 2025, the law explicitly includes rebates in the taxable base for wholesale drug distributors.
There may be ways for wholesale drug distributors and mail order pharmacies to structure transactions so the tax applies only on the net-of-rebates number — but they require careful planning under the new framework.
(b) For purposes of paragraph (a), clause (4), "gross revenues" includes the amount of any rebate provided by the wholesale drug distributor to a customer, however provided, including a rebate provided under a contractual obligation. "Rebate" means any price concession provided by a wholesale drug distributor, including any price concession based on the actual or estimated utilization, sale volume, or effectiveness of a legend drug.
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