Other/Miscellaneous:
Minnesota: State High Court Affirms that Wholesale Drug Distributor May Exclude Customer-Earned Rebates from Gross Revenue Tax Base
Case No. A23-1973, Minn. (11/6/24). The Minnesota Supreme Court (Court) affirmed that for purposes of computing Minnesota’s Wholesale Drug Distributor Tax (WDDT), taxable “gross revenues” does not include certain rebate amounts paid to a wholesale drug distributor’s customer pursuant to a rebate agreement. The underlying case concerned whether amounts that were invoiced to the taxpayer’s customers for the purchase of wholesale legend drugs – but were either credited to the customer’s account or returned via check pursuant to a rebate agreement – must be included in the taxpayer’s “gross revenues” for WDDT purposes. In holding for the taxpayer, the Court essentially agreed with the Minnesota Tax Court, which referenced the definition of “gross revenues” under statute as “total amounts received in money or otherwise” and determined that the taxpayer in this case did not “receive” the rebate amounts because it was contractually obligated to pay the amounts to customers once the rebates were earned. Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10182-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
