Minnesota Justices Question State’s Taxation of Drug Rebates

Three Minnesota Supreme Court justices at arguments Monday seemed likely to agree with a wholesale drug distributor that the state’s $500,000 tax bill improperly characterized its drug rebate program.

The revenue commissioner wants the high court to overturn a 2023 tax court ruling that Dakota Drug Inc. was right not to include rebate amounts customers earn and then use for future purchases when the company calculated its gross revenue from sales of prescription and generic drugs.

Justice Gordon L. Moore III seemed skeptical of the commissioner’s insistence that Dakota’s rebates that are applied to a bill later are different from ...