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Judge: N.C. tax collectors can't have Amazon customer data

Posted October 26, 2010

— A federal judge has ruled that Amazon.com doesn't have to turn over customers’ personal information to the North Carolina Department of Revenue.

The online retail giant has been fighting for months with the state, which wants detailed records of what customers have purchased since 2003 so that it can collect an estimated $50 million in sales and use taxes.

Amazon provided the state with details about purchases without identifying which customer bought what, but the state wanted names and addresses linked to the purchases.

In a lawsuit, Amazon argued the request violated customers’ privacy because the state would be able to determine their buying patterns. The American Civil Liberties Union joined Amazon in the fight.

“The ACLU is not taking issue with the (revenue) department’s authority to collect taxes on these purchases, but there is no legitimate reason why government officials need to know which North Carolina residents are reading which books or purchasing which specific brands of products,” Katy Parker, legal director for the ACLU of North Carolina Legal Foundation, said in a statement Tuesday.

U.S. District Judge Marsha Pechman agreed, ruling Monday that the state’s request went too far and "runs afoul of the First Amendment” and that there was “no legitimate need” for the state to know what customers purchased.

"Citizens are entitled to receive information and ideas through books, films and other expressive materials anonymously," Pechman wrote in her decision. "The fear of government tracking and censoring one’s reading, listening and viewing choices chills the exercise of First Amendment rights.”

State officials have maintained that they were never interested in people's buying patterns, and they said Tuesday that they haven't decided whether to appeal Pechman's ruling.

"This case has been twisted into something it is not. The North Carolina Department of Revenue wants to collect the sales tax that is due to the state and nothing more," Beth Stevenson, spokeswoman for the revenue department, said in a statement.

"The department has not needed – and does not want – titles or similar details about products purchased by Amazon customers. The department has already purged that kind of information from its computer system that Amazon previously sent," Stevenson said.


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  • independentvoter3 Oct 28, 2010

    doubletrouble?...If the use tax is voluntary, than buying on line and not reporting to be taxed isn't tax evasion or illegal... right???

    If this is true... then what the heck is the problem??? Click, purchase, click, purchase, click, purchase :) :) :)

  • redfish27 Oct 27, 2010

    Don't get me wrong - I completely agree that things shouldn't be taxed over and over - our taxation scheme is really confusing, especially since every state and town have their own rules. But that aside, the reason the use tax is voluntary is because the state doesn't have a good way to collect data summarizing your untaxed purchases that would be subject to a use tax. That's really why they're trying to get these records from amazon, but they requested too much, and that's why they got shot down. I understand why the law is there, but it's antiquated (1939) and nearly impossible to enforce now.

  • doubletrouble Oct 27, 2010

    But either way, buying online to avoid sales tax and then not reporting those purchases on your state tax return is tax evasion.
    The reason why it's "voluntary" is because legally, the State doesn't have a foot to stand on. If I move here from another state, I have to pay sales tax, use tax or highway tax, when I bring it here, pay for it every year as property, if I keep it + pay a highway tax when I fill it with gas. Give me a break NC...the revolution started with taxation without representation, now we just have taxation, that pays for the representation--- and they want more taxation, go figure.

  • Capt Mercury Oct 27, 2010

    All of you who expressed delight in the court ruling do know that sales tax rates will just go higher to make up for the difference, right? This is indeed good for those who buy on-line, but bad for physical businesses trying to sell here. It's a zero-sum game folks. If the money is going to be spent, it has to come from somewhere. Best that we all just pay attention to how the money is spent.

  • chevybelair57sd Oct 27, 2010

    another example of NC government wasting our tax dollare, the state tax form already charges you sales tax according to your gross taxable income. when will we vote with our heads instead of a promise which never comes or implied handout that never arrives.

  • employeenc Oct 26, 2010

    They really don't care what you bought, they just wanted to send you a fair tax bill with the correct rate for the item purchased. This just makes it easier. Every purchaser will receive a bill for the highest tax rate based on the amount of the sale. No problem!

  • ejrsut Oct 26, 2010

    It seems to me that I have scuffed the floor earlier with my comment, that's why I don't comment, but I have been following this since it was first announced earlier this year, but I know that is not over. Until then I will continue watch this & by the way, OGE I've never been to a yard sale & never shopped on Craigslist either, but I will do so on any site & I have no problem with sales tax.

  • avguildcom Oct 26, 2010

    The reason Fetzer is not making hay on this is because it was supported by the NCGOP as a way to raise taxes. This is the fault of the Quial Ridge Book store in Raleigh and you the citizen. You fell for the sad story of the small book store closing and then let this law be passed without any fight....

    Let me say this again... NCGOP Fetzer has never said a word about this because it was his secret way of raising your taxes. Read my Lips... Fetzer saw this as a way to trick you into paying more taxes

  • DontAnnoyMe Oct 26, 2010

    @skeeter - that's not true for autos, all you pay is the highway use tax as usual.

  • imdicktrickle Oct 26, 2010

    Thank goodness! Some common sense!