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
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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.
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