Minnesota Lawmakers Propose New Ridehailing, Delivery Fees

Two bills proposed in the Minnesota state legislature would institute new fees on ridehailing apps and delivery services to help fund transportation and transit in the state and supplement declining revenue from the state’s gas tax, reports Peter Callaghan for MinnPost. “Hennepin County Commissioner Marion Greene, who is chair of the Hennepin County Regional Rail Authority, said the money is needed to both build and operate transit.”

The proposed delivery fee is 75 cents per package on items eligible for sales tax (which excludes groceries and prescription medications). “The so-called Amazon fee is expected to raise about $210 million a year. The form of the ride service fee is still in flux between a flat fee and a percentage fee and estimates are still being analyzed.”

Some critics of the flat delivery fee call it regressive, pointing out that the added cost could disproportionately harm small businesses such as local restaurants and grocery stores that offer delivery services. Although the state projects budget surpluses, the Department of Transportation says it predicts a “fiscal cliff” for transportation because car and gas taxes dropped more dramatically during the pandemic, and federal emergency relief funds are drying up.