Amazon Fights Demand for Customer Records

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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.

Amazon is asking
a federal judge in Seattle to rule that the demand is illegal, and
left open the possibility of requesting a preliminary injunction
against North Carolina’s tax collectors.

 

 
 

"The best-case
scenario for customers would be where the North Carolina Department
of Revenue withdraws their demand because they recognize that it
violates the privacy rights of North Carolina residents," Amazon
spokesperson Mary Osako told CNET.

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. The dispute
arose out of what had otherwise been a routine sales and use tax
audit of Amazon by North Carolina’s tax agency.

 

 
 

A spokeswoman
for the North Carolina Department of Revenue said she would have
to review the lawsuit before answering why the tax agency needed
Amazon customer information. "Any comment at this time would
be premature," Beth Stevenson said in an e-mail message.

Amazon did
provide the state tax collectors with anonymized information about
which items were shipped to which zip codes. But North Carolina
threatened to sue if the retailer did not also 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.

"Despite
assurances from tax collectors that the era of Big Brother isn’t
here, they seem to be doing a lot to rewrite the book for modern
times," Pete Sepp, the executive vice president for the National
Taxpayers Union
, told CNET. "Unless Amazon succeeds, extraordinary
demands like these could become the norm."

The 14-page
complaint says that North Carolina tax collectors visited Amazon
in Seattle last month in an effort to "obtain information from
Amazon regarding Amazon’s sales to North Carolina residents."
They hand-delivered a letter that amounted to an ultimatum: provide
customer names by April 19 or face the consequences.

Read
the rest of the article

April
21, 2010

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