M+E Daily
Amazon Prevails in Customer Privacy Fight with NC Tax Collectors
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Amazon.com does not have to turn over to North Carolina’s tax agency information on nearly 50 million purchases of DVDs and other goods by state residents, a Washington federal court has ruled.
The tax collectors had been seeking to ascertain whether in-state Amazon customers owed additional taxes on purchases made between 2003 and 2010, according to CNET. Amazon is not required to collect a 5.75% sales tax on shipments to North Carolina, since it has no offices or warehouses in the state. But North Carolina’s Department of Revenue reminds residents that all mail-order purchases are subject to the “use tax” — as are movie and music downloads, ringtones, and other .
U.S. District Judge Marsha Pechman held that the North Carolina record-seeking policy “runs afoul of the First Amendment” and granted Amazon summary judgment. The problem, in the court’s view, was that the state sought private (and unnecessary) information of particular titles residents had purchased. The state tells CNET that it is reviewing the ruling before deciding on whether to appeal.
Nationwide, the issue of state tax collection is far from settled for Amazon and other online retailers. The Washington federal court’s decision comes as mulls requiring online retailers to report the total dollar value of purchases made by each state resident. A ruling is also imminent in Amazon’s two-year legal battle with the state of New York over a similar state tax regulation.
More on the issue at USA Today.
