North Carolina badgers Amazon to cough up our personal information
Amazon fights demand for customer records
by Declan McCullagh for CNET.com
Amazon.com filed a lawsuit on Monday to fend off a sweeping demand from North Carolina's tax collectors: detailed records including names and addresses of customers and information about exactly what they purchased.
The lawsuit says the demand violates the privacy and First Amendment rights of Amazon's customers. North Carolina's Department of Revenue had ordered the online retailer to provide full details on nearly 50 million purchases made by state residents between 2003 and 2010.
Because Amazon has no offices or warehouses in North Carolina, it's not required to collect the customary 5.75 percent sales tax on shipments, although tax collectors have reminded residents that what's known as a use tax applies on anything "purchased or received" through the mail.
North Carolina threatened to sue if the retailer did not divulge the names and addresses linked to each order--in other words, personally identifiable information that could be used to collect additional use taxes that might be owed by state residents.
In a 2002 decision, the Colorado Supreme Court ruled that the First Amendment protects "an individual's fundamental right to purchase books anonymously, free from governmental interference."
North Carolina's aggressive push for customer records comes as other states are experimenting with new ways to collect taxes from online retailers. California may require retailers to report the total dollar value of purchases made by each state resident, as CNET reported last month, and Colorado already has enacted such a law. A decision is expected at any time in a related case that Amazon filed against New York state.
Last year, Amazon discontinued its affiliate program in North Carolina, which provides referrers with a small slice of the transaction, after the state legislature enacted a new law that would have used that program to force the company to collect sales taxes.
A North Carolina legislator said at the time that the state would be able to force online retailers to collect even retroactive taxes; tax officials have reportedly sent letters to online retailers in the last few months saying they're required to pay retroactive sales taxes.