North Carolina Demands Amazon Reveal Every Detail Of Purchases By NC Residents

from the hope-you-didn't-buy-anything-embarrassing dept

For years, there have been attempts by states to get Amazon to collect sales tax on purchases in those states, even if Amazon doesn't actually have any facilities in those states. Historically, companies haven't needed to charge sales tax if they don't directly operate in those states since (the argument goes) they're not making use of state resources and thus shouldn't have to collect for the state. Of course, buyers are still supposed to pay the sales tax directly to the state -- though that almost never happens. Various states have worked on ways around this in blatant revenue grabs. For example, it's become popular for states to claim that if a particular state has any residents who have signed up as Amazon affiliates, Amazon now has a presence in that state. In response to this, Amazon has cut off affiliate programs in various states. One of those states was North Carolina.

North Carolina's response was to go even further -- and have its Department of Revenue demand from Amazon a list of everyone in the state who had made a purchase on Amazon.com since 2003. Amazon contends that it already turns over plenty of data to North Carolina:
It routinely provides the Revenue Department with "voluminous information" about its sales to North Carolina addresses as part of routine audits of the company's compliance with sales and use tax laws. The information includes the date and total price of each transaction, the city, county and ZIP code to which each item was shipped and Amazon's standard product code for each item, which allows officials to see the description of every product purchased.
But what it does not provide is the actual names and addresses -- and North Carolina threatened to charge Amazon with contempt if it didn't provide that info. In response, Amazon is now suing North Carolina, claiming that the demand to turn over such information is a massive breach of the First Amendment, in that it could create serious chilling effects on what people would buy if they knew that the gov't was reviewing all of their purchases.

It's hard to see how North Carolina has any case here at all. Demanding such information would be a huge breach of privacy and of individual rights -- all in a blatant attempt by the state to collect more revenue. Hopefully the courts shut down this overreach quickly.

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  1. icon
    Avatar28 (profile), 20 Apr 2010 @ 3:27pm

    Re: Re: Use Tax is constitutional

    @phillip

    If I buy A book in NJ for 10.00 and pay 5% tax I just paid 10.50, but now I have to pay NC another 5% use tax so now its 11.00.

    If I buy the same book in NC for 10.00 and pay 5% tax I pay 10.50 total.


    If it worked that way then you would be correct, however I don't believe that it does. Instead I believe that you are responsible for paying the DIFFERENCE in tax. I.e. if your neighboring state charges a 2.5% state tax rate and your state has a 5% state tax rate then you are responsible to pay the difference of 2.5% to your state. I believe it only deals with the state tax rates as well, not the local tax rates.

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