Amazon to charge Minnesota sales tax starting Oct. 1

Get that Christmas list together ASAP: Amazon’s announcement that it will start collecting sales tax from  Minnesotans brought the following coverage:

Martin Moylan at MPR: “Online-only retailers don’t have to collect state sales taxes if they do not have a physical location in a state. But Amazon also says it is considering various opportunities to expand in Minnesota. The retailer has been collecting sales taxes in an increasing number of states as it establishes warehouse or other operations in them to speed the delivery of goods. The state revenue department estimates Minnesota loses $400 million a year in uncollected sales taxes for online, catalog and other purchases made by state residents.”

Kavita Kumar at the Strib: “Monday’s revelation led to speculation that Amazon may open a warehouse, data center or some other operation in the state or buy an existing firm.The company was vague about what prompted the change, though it said it ‘will be required’ to do so starting Oct. 1. We’re considering various opportunities and plan to expand in Minnesota,’ Ty Rogers, an Amazon spokesman, said in an e-mail.”

“Sham” seems almost euphemistic. At MPR, Madeleine Baran writes, “An attorney representing a woman who claims that the Rev. Michael Keating sexually abused her in the late 1990s sued the Archdiocese of St. Paul and Minneapolis today for conducting a ‘sham investigation’ into her complaint. The lawsuit filed in Ramsey County District Court also accuses the Rev. Kevin McDonough — a former top church deputy — of defamation for falsely claiming that the woman suffered from ‘delusions.’”

Maple Grove is No. 2! In the ceaseless flow of Best/Worst lists, today’s has Money magazine deeming Maple Grove the second Best Place to Live. Says WCCO-TV, “Maple Grove was named the second best place to live in the latest list, following McKinney, Texas. According to the magazine, the list looked at small cities across the country with populations of 50,000-300,000 and ranked them based on economic strength, job growth, affordable housing, safety, schools, accessible healthcare, arts and leisure and the ease of living.”

In another assault on job creators: John McKinnon and Damian Paletta of the Wall Street Journal write, “The Treasury Department tightened tax rules Monday to deter U.S. companies from moving their legal headquarters to lower-tax countries, part of a White House effort to slow a wave of so-called corporate inversions that effectively reduce federal revenues. Treasury officials took action under five sections of the U.S. tax code to make inversions harder and less profitable … . The tax changes took effect immediately, officials said, and applied to all deals that hadn’t closed by Monday. The new guidelines could impact a number of pending mergers and acquisitions, including Medtronic Inc.’s proposed acquisition of Irish medical-device maker Covidien.”

At Bloomberg Richard Rubin and Ian Katz say, “The rules, which apply to deals that close starting today, include a prohibition on ‘hopscotch’ loans that let companies access foreign cash without paying U.S. taxes, and impose new curbs on actions that companies can use to make such transactions qualify for favorable tax treatment. The changes will have the biggest effect on eight U.S. companies with pending inversions, including Medtronic Inc. (MDT) and AbbVie Inc., which plan the two largest such deals in U.S. history. In its purchase of Covidien Plc (COV), Medtronic is loaning some of its untaxed profits outside the U.S. to its new Irish parent company, and that transaction could be penalized by the new anti-hopscotch rule.” “Hopscotch” … that’s kind of like “gaming” isn’t it?

Two more residential towers for downtown Minneapolis. Jim Buchta of the Strib says, “Opus Development Co. executives said they are now planning two residential towers with 30 floors or more on what’s called the Ritz block, which fronts Nicollet Mall between 3rd and 4th Streets. The plan is a departure from an earlier proposal to build offices and housing on the block, which is currently a surface parking lot. But with Nic on Fifth already 45 percent leased just days after opening, Opus executives are betting that more housing is the way to go.”

The Governor’s not the only one “appalled.” Rachel Stassen-Berger of the Strib reports, “Gov. Mark Dayton on Monday said that a Star Tribune report of a nonprofit using state funds to subsidize cruises, a director’s car lease and spa treatments was very concerning and alarming. ‘I was personally really appalled,’ Dayton said. ‘I take it very seriously.’”

So you’re telling me there’s a chance. Stribber Abby Simons has poll numbers that are probably encouraging to GOP Supreme Court candidate Michelle MacDonald. “A recent poll of Minnesota attorneys reveals a very comfortable lead for Minnesota Supreme Court Justice David Lillehaug against his Republican Party-endorsed challenger Michelle MacDonald. The poll of 783 Minnesota State Bar Association attorneys who are likely practice before the appellate courts revealed 93.4 percent backed Lillehaug, compared to 6.55 percent for MacDonald.”

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Comments (10)

  1. Submitted by Tim Walker on 09/23/2014 - 07:28 am.

    “… The state revenue department estimates Minnesota loses $400 million a year in uncollected sales taxes for online, catalog and other purchases made by state residents.”

    Let’s apply that $400 million toward fixing potholes and making other needed repairs to the state’s infrastructure.

  2. Submitted by Pavel Yankovic on 09/23/2014 - 09:02 am.

    Loss?

    The stale loses nothing. It is money that they never had and were not entitled to in the first place if the purchases were made out of state.

    I do a lot of traveling. If I make a purchase in Montana where there is no sales tax should I pay tax to the state of Minnesota if I bring the item into the state? I will await your answers.

  3. Submitted by Jonathan Ecklund on 09/23/2014 - 09:59 am.

    MacDonald

    “So you’re saying… there’s a chance!”

    • Submitted by Todd Hintz on 09/23/2014 - 10:31 am.

      MacDonald

      So the door’s not COMPLETELY closed? That’s good enough for me. Pop some more corn and toss me the remote, honey! The race is still on!

    • Submitted by RB Holbrook on 09/23/2014 - 11:00 am.

      Of course there is

      As we know from quantum physics, Justice Lillehaug could suddenly vanish, and reappear somewhere in Madagascar. Ms. MacDonald could win by default.

      If that doesn’t happen, I don’t rate her chances very highly.

  4. Submitted by Kathy Speed on 09/23/2014 - 11:25 am.

    Good News for MN

    The use tax is a form of an excise tax that is in lieu of additional local taxes. The use tax protects your local in-state businesses from being unfairly undercut by out of state businesses. The taxes collected via use tax help to pay for essential and necessary local services. For example, the use tax you pay when you register and license your motor vehicle or boats helps to pay for better infrastructure. While the state has a right to collect that tax, they are unlikely to pursue a small single event use tax avoidance that you describe by purchasing something in Montana on one of your trips.

    There is a public “good” in trying to ensure a level playing field between in-state businesses and out-of-state firms. Sales and Use tax help to diversify the tax revenue collected for essential services. If you eliminate or avoid paying that then other local direct taxes will need to rise to cover the cost of local services that are currently defrayed by use tax revenue collections. If the local community is small and does not have the ability to raise the revenue lost to uncollected sales and use taxes from other sources, then services to the community as a whole would have to be reduced or eliminated.

    In Kansas, the Republicans cut taxes so much that many local schools that are anchors in small towns are having to close since there is insufficient taxes available to keep them open. That is the heartbeat of a rural town.

    Minnesota is still a largely rural state with many small towns and cities. The convenience that Amazon plays in getting goods to these outstate locations is beneficial. Applying the “but for” test where the tangible personal property in question would be taxable in Minnesota if it had been purchased in Minnesota generally means that the purchase in question should have use tax remitted. You may feel that you got something over on “the government”, but the government stands in place for your communal interests. As another commentator noted, recovering the annual loss of $ 400 million in sales/use taxes from internet sales to in-state users sure would help with needed services. Where sales and use tax software makes the administration and collection of taxes rather straightforward for retailers, the use tax is most efficiently collected by the retailer. It shores up a gap in compliance preventing undue loss in revenues to your local and state government. This is good news for Minnesota.

  5. Submitted by Pavel Yankovic on 09/24/2014 - 07:38 am.

    Thanks.

    Kathy, thanks for the explanation.

    All of this revenue to the state and they still don’t have enough?

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