Tags: amazon | minnesota | sales | tax

Amazon's Minnesota Sales Tax Hiatus Ends – Question Is Why?

By    |   Wednesday, 24 September 2014 08:03 AM

Amazon said it will begin collecting sales tax in Minnesota beginning Oct. 1, leading many to speculate as to why.

According to the Star Tribune, Amazon cut ties with affiliated Minnesota businesses in July of last year after a new law required companies with a physical presence in the state to collect sales tax. Prior to that law, Amazon enjoyed a huge advantage over competitors like Best Buy and Target that maintain corporate headquarters as well as brick-and-mortar stores in Minnesota.

Amazon's announcement suggests it will have a physical presence in the state starting next month, but whether that means office space, a warehouse, distribution center, or some other enterprise remains unclear.

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When queried by reporters at the Tribune, Amazon was vague about its plans, saying only it "will be required" to collect the tax starting in October.

"We’re considering various opportunities and plan to expand in Minnesota," Ty Rogers, an Amazon spokesman, told the Tribune in an email.

Myron Frans, the state’s revenue commissioner, was equally mum about Amazon's plans.

"We are pleased that they are planning to expand in Minnesota, and we would defer to Amazon any specific questions about the change or its plans," he said in a statement released Monday.

Adding to the mystery, the state Revenue Department said it doesn't yet have an estimate for how much tax revenue might be collected from Amazon's new venture.

Many residents hope that the new venture will have something to do with Amazon's efforts in same day delivery — perhaps for the Twin Cities — or maybe something to do with its drone delivery program.

"They could have one right now being built, and we wouldn’t know about it, as crazy as that sounds," said Gene Munster, an analyst at Piper Jaffray & Co. "But that could be hard to keep quiet."

Munster said that the reason might not be as exciting as some might dream, adding that the new venture could be quite boring.

"They could have a warehouse here in Prior Lake that is just filled with servers," he said.

Amazon currently collects sales tax in 21 states. Minnesota sales tax currently stands at 6.875 percent.

A history of Amazon's state-by-state tax battles was chronicled in a book released in the fall of last year, "The Everything Store: Jeff Bezos and the Age of Amazon" by Bloomberg reporter Brad Stone.

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Amazon said it will begin collecting sales tax in Minnesota beginning October 1, leading many to speculate as to why.
amazon, minnesota, sales, tax
Wednesday, 24 September 2014 08:03 AM
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