Local News

State, ACLU settle privacy lawsuit over Amazon customers' info

Posted February 9, 2011

— The North Carolina Department of Revenue has settled a privacy lawsuit with the American Civil Liberties Union and has agreed to stop asking for the personal information of Amazon.com customers, officials said Wednesday.

Amazon has been fighting for months with the state, which wanted detailed records of what customers in North Carolina have purchased since 2003 so that it could collect an estimated $50 million in sales and use taxes.

The online retail giant 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 ACLU later joined Amazon in the fight.

"The N.C. Department of Revenue does not need access to private customer records that reveal which specific customers in North Carolina have ordered which specific books, music, or movies in order to complete its audit of Amazon and collect any taxes owed,” Jennifer Rudinger, executive director of the ACLU of North Carolina, said in a statement Wednesday.

“We are pleased that the public’s First Amendment rights have been upheld by this settlement, which prohibits the department from seeking this kind of information from Amazon or other Internet retailers in the future," Rudinger said.

Amazon wasn't part of the settlement, Rudinger said, and it was unclear Wednesday whether the company's lawsuit over the Revenue Department's audit of its sales in North Carolina was pending on appeal.

amazon State, ACLU settle privacy lawsuit over Amazon.com

In October, U.S. District Judge Marsha Pechman ruled that the state’s request for customer data 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.

"The fear of government tracking and censoring one’s reading, listening and viewing choices chills the exercise of First Amendment rights,” Pechman wrote in her ruling.

Beth Stevenson, spokeswoman for the Revenue Department, said Wednesday that the settlement with the ACLU reinforces the argument that the state was never interested in people's buying patterns.

"The case between the North Carolina Department of Revenue and Amazon has long been twisted into something it is not. Bottom line, this is about fairly collecting the tax that is due to the state of North Carolina and nothing more," Stevenson said in a statement.

Pechman's ruling upheld the state's right to collect sales tax and the necessary information to do so, Stevenson said.

"The department has always maintained that we do not need – or want – titles or similar details about products purchased by Amazon customers. The department voluntarily destroyed the detailed information that Amazon unnecessarily provided and offered them the opportunity to comply with the state tax laws moving forward," she said.

"The lawsuit on this particular issue could have been avoided altogether if not for the aggressive stance Amazon took to avoid compliance with North Carolina’s tax laws," she said. "There would have never been an issue of customer privacy if Amazon would simply collect the North Carolina sales tax that others already do."

The Revenue Department also faces a lawsuit from several online travel companies over a recent change to the state tax code.

Orbitz, Travelocity.com, Hotels.com, Hotwire Inc., Travelscape and Trip Network Inc. allege in their lawsuit that the state and counties want to collect sales and occupancy taxes on the fees the firms charge customers to book cheap hotel rooms. They maintain that the state law violates federal law governing online commerce and arbitrarily changes the contracts they have with hotels in North Carolina, and they want a judge to void the law.


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  • rbaff79 Feb 11, 2011

    Overstock.com is collecting sales tax now! Thanks Bev! Now do you still want the use tax on top of that sales tax?

    Overstock: "Sales tax will be charged to all orders that are processed with a North Carolina shipping address, regardless of the location the product ships from. Remote sellers, such as Internet retailers and catalog companies are required to collect taxes in states where the company has a physical presence. Due to a recent change in North Carolina, we are collecting sales tax at check-out for orders shipping to North Carolina. North Carolina charges tax on shipping costs."

  • geosol Feb 9, 2011

    So can we give more tax breaks to the ultra rich now? Its obvious that they really need it and every time the right wingers give it to them the economy just SOARS in response, right?

  • GetRight Feb 9, 2011

    ""Here's a hint...rich people are rich for one reason and it's a primary one; THEY DON'T PAY TAXES!!! Get it?"" A Golo ignoramus

    If this were true then the guy making $60k and brings home $43k would be rich if he just kept the whole $60k. That is ignorance gone to seed.

    For the benefit of those reading allow me to correct this statement. Rich people are rich for one reason and it's a primary one: The use the 24 hours they get each day differently than poor people. They behave differently because they think differently.

  • koolady Feb 9, 2011

    The more taxes a government collects, the more they want. It is all about greedy politicians.

  • godnessgracious Feb 9, 2011

    For that matter, I sell things to the State of NC and they certainly don't PAY sales tax... "Tax Exempt" status is what they give themselves. Crock!

    Why would they pay tax to themselves? There is no crock, you just didn't think about it. If they did pay tax to themselves, they would not have any more or less revenue, probably less because it takes administrative costs to collect the tax that they had paid to themselves. Are you in favor of more beaurocracy with no purpose? Also the state has expenses that it must pay just to enable you to earn an income. It also has expenses when you want to buy something. Health inspectors aren't free. Roads aren't free. High school education isn't free.

  • artist Feb 9, 2011

    So.. the NC tax form states that if you do not receipts for your online purchases... they charge you a flat fee of $29.00 in tax.

    Now what are they going to do?

    Start making adjustments to everyone's tax filings from last year?

    Are they going to credit you the $29.00 fee, then charge the Amazon tax on purchases?

    I guarantee they will want to collect tax from Amazon purchases... on top of charging you the $29.00 tax fee.

    What a mess.

  • RB-1 Feb 9, 2011

    I'd like to see how much in taxpayer dollars were wasted by the state in this fruitless quest, not just by state attorneys but by everyone who works for them who worked on this and any other state employees who had to work on this agenda.

  • wayneboyd Feb 9, 2011

    Littlebopeep...you must live in a fairyland. Didn't you read the article on this sight last week that said the state budget for this year was 19 billion and .75 cents out of every dollar was to pay government salaries and benefits, the road I go to work on isn't dirt and doesn't get muddy when it rains but it is four inches narrower than my truck and rides like the old dirt roads used to. The town where I go to shop is threatened by the state for fines if it doesn't come up with the monies to repair it's decripid sewer system within two years, we don't have a government for the people we have a government for the government. Your part time guys in Washington have padded their lives with luxury at the expense of you and I, Your state employee retirement is in no danger of going broke as is social security, but then theirs has never been raided by the government. I could go on and on, I don't mind paying taxes, but give 'em more, they'll waste more.

  • geoherb1 Feb 9, 2011

    If you don't like the way the law is written, talk to your representatives in the General Assembly. It's clear under § Gen. Stat. 105‑269.14. Payment of use tax with individual income tax. Not paying a similar tax is one of the schemes that Leona Helmsley used as a ticket to prison.

  • Ohprah Feb 9, 2011

    scruples? I didn't know that means lazy.