Customers of Amazon (AMZN) in Minnesota will be subject to sales tax as of October 1.
Minnesota law states that online retailers don’t have to charge a sales tax if they don’t have a physical presence in the state. The online retailer admits that it’s planning to expand into the area, but it hasn’t said what this expansion will include, reports Minneapolis Star Tribune.
It’s possible that Amazon is planning to add a distribution center in the state. However, it’s also possible that the company is simply planning to set up a new office or a location to store servers for its Web Services, Minneapolis Star Tribune notes.
Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas, told Minneapolis/St. Paul Business Journal that the news means Amazon is likely planning to add a distribution center in the state. He said the company is likely willing to take the tax hit to offer same-day shipping.
AMZN shares were largely unaffected by the new as of Tuesday afternoon.
More Amazon (AMZN) News
- Amazon Strike: AMZN Workers Walk Off Job in Germany
- Amazon (AMZN) Takes on Tablet Market With Cheap Power
- A Look at Amazon’s New Litter of Kindles
