North Carolina Demands Amazon Reveal Every Detail Of Purchases By NC Residents

from the hope-you-didn't-buy-anything-embarrassing dept

Tue, Apr 20th 2010 12:20pm — Mike Masnick

For years, there have been attempts by states to get Amazon to collect sales tax on purchases in those states, even if Amazon doesn't actually have any facilities in those states. Historically, companies haven't needed to charge sales tax if they don't directly operate in those states since (the argument goes) they're not making use of state resources and thus shouldn't have to collect for the state. Of course, buyers are still supposed to pay the sales tax directly to the state -- though that almost never happens. Various states have worked on ways around this in blatant revenue grabs. For example, it's become popular for states to claim that if a particular state has any residents who have signed up as Amazon affiliates, Amazon now has a presence in that state. In response to this, Amazon has cut off affiliate programs in various states. One of those states was North Carolina.

North Carolina's response was to go even further -- and have its Department of Revenue demand from Amazon a list of everyone in the state who had made a purchase on Amazon.com since 2003. Amazon contends that it already turns over plenty of data to North Carolina:

It routinely provides the Revenue Department with "voluminous information" about its sales to North Carolina addresses as part of routine audits of the company's compliance with sales and use tax laws. The information includes the date and total price of each transaction, the city, county and ZIP code to which each item was shipped and Amazon's standard product code for each item, which allows officials to see the description of every product purchased.

But what it does not provide is the actual names and addresses -- and North Carolina threatened to charge Amazon with contempt if it didn't provide that info. In response, Amazon is now suing North Carolina, claiming that the demand to turn over such information is a massive breach of the First Amendment, in that it could create serious chilling effects on what people would buy if they knew that the gov't was reviewing all of their purchases.

It's hard to see how North Carolina has any case here at all. Demanding such information would be a huge breach of privacy and of individual rights -- all in a blatant attempt by the state to collect more revenue. Hopefully the courts shut down this overreach quickly.

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Filed Under: north carolina, purchases, receipts
Companies: amazon

48 Comments

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NAMELESS.ONE, 20 Apr 2010 @ 12:22pm

those are my panties...HONEST
haha...as he explains to his wife
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Jeremy, 20 Apr 2010 @ 12:24pm

I almost hope Amazon loses this just so we can see all the stuff every politician in NC has purchased. I'm sure they would LOVE that
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- Anonymous Coward, 20 Apr 2010 @ 12:29pm
  
  Re:
  Amazon doesn't sell women, so I doubt the NC politicians would be shopping there.
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- Hephaestus (profile), 20 Apr 2010 @ 12:51pm
  
  Re:
  I want to see them go after CraigsList for the same reason ...
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- Anonymous Coward, 20 Apr 2010 @ 1:05pm
  
  Re:
  What makes you think there wouldn't be exemptions for politicians?
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- ChimpBush McHitlerBurton, 20 Apr 2010 @ 1:14pm
  
  Re:
  Are you serious??
  
  I'm completely unable to tell without the use of the Sarcmark (tm)
  
  CBMHB
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Ima Fish (profile), 20 Apr 2010 @ 12:41pm

This sort of BS is exactly why Article I, Section 10 of the US Constitution says:

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress.

If I leave my state and go to New Jersey and buy something, I do not have to pay an import tax in my state.

If I pay someone to go to New Jersey and buy something for me, I do not have to pay an import tax in my state.

But for some reason if I pay FedEX or UPS to pick up something I bought from NewEgg in New Jersey, suddenly my state wants me to pay taxes to bring it into my state. Use taxes are duties on stuff I import from other states, but yet it's perfectly legal.
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- Anonymous Coward, 20 Apr 2010 @ 12:57pm
  
  Re:
  So then, should we all be paying Washington State taxes when we buy from Amazon? Since if hire FedEx to get a package that we bought from Amazon, surly when we bought the package we would have paid for taxes locally just like when you cross the border to buy from a brick and mortar store.
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  - You have no point., 21 Apr 2010 @ 1:38pm
    
    Re: Re:
    In that case we should buy everything from NH or some of those other states without sales tax.
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- Dementia (profile), 20 Apr 2010 @ 1:43pm
  
  Re:
  The problem with your cases here is that if someone goes to New Jersey and buys something, they pay New Jersey sales tax on it. The way the states are putting it is that there hasn't been any sales tax paid to anyone at all.
  
  Now, just for clarification, I do not support NC, or any other state in doing something like this.
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- known coward, 21 Apr 2010 @ 6:54am
  
  Gov Patterson would like to have a word with you MR. Fish
  Technically speaking you are suppose to pay NY state sales tax on purchases made out of state.
  
  For example if you were to buy a car in NJ you would not pay sales tax on it, but when you tried to register it in NY you would have too.
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scote, 20 Apr 2010 @ 12:47pm

Amazon already gave away too much info
The real question is why did Amazon already give away

"The information includes the date and total price of each transaction, the city, county and ZIP code to which each item was shipped and Amazon's standard product code for each item, which allows officials to see the description of every product purchased."

Does NC really even have a right to know the exact UPC of every item sold to NC residents rather than product categories?

As has been shown many times in the past, even aggregated data can be disaggregated with a surprising degree of accuracy. If Amazon turns over people's purchase records--even without UPCs or item descriptions, it is probable that many of the transactions could be disaggregated based on the time, date, price and zip code information or other metrics.
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- John Gardner (profile), 20 Apr 2010 @ 12:55pm
  
  Re: Amazon already gave away too much info
  I was just thinking that myself. What business does NC have asking a private company for the details (even if the name is left off) of the purchases made that end up in their state?
  
  This attempt to get at the "lost" sales tax revenue by attacking the seller is no different than the **AA whining about lost sales revenue. So find another way to earn that revenue. Eliminate the sales tax and find another means of collecting the necessary revenue to operate your government.
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- Any Mouse, 20 Apr 2010 @ 3:49pm
  
  Re: Amazon already gave away too much info
  None of this information is personally identifiable. There is no way to 'disaggregate' the information to correlate it with a specific buyer without further information. Unless, you know, you're the only one that lives at that particular postal code.
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  - Cahoots, 20 Apr 2010 @ 4:20pm
    
    Re: Re: Amazon already gave away too much info
    Not necessarily true. Anyone who uses a PO Box for a delivery address could easily be identified if Amazon provided the complete ZIP+4 instead of just the 5 digit ZIP code. PO Boxes in the US have a unique ZIP+4 code.
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  - Rstr5105 (profile), 20 Apr 2010 @ 5:29pm
    
    Re: Re: Amazon already gave away too much info
    It is actually fairly easy in the long run to disaggregate the info.
    
    Separate out all the individual items and look for similar patterns within certain areas, eg. a lot of one type of product is going to one street or house.
    
    It's not 100% reliable, but it gets you close enough to take a well-educated guess.
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Daddy Warbucks, 20 Apr 2010 @ 12:55pm

Pay for play
The unionized state employees need themselves some more money…how do you expect them to live off $110,000 a year?? Please child…
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sehlat (profile), 20 Apr 2010 @ 12:56pm

Penance and Public Relations Gambit?
Amazon bought themselves a maulk-load of bad karma a while back by pulling books from publishers who were pushing them to raise prices on eBooks. They pulled the books, not just the eBooks, and hurt many people, some of whom I call friends. I haven't bought much from them since.

Some of the thinking behind this fight may be Amazon trying to undo some of the damage of that badly-thought-out action, which, at least for me, backfired on them.
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- Ragaboo, 20 Apr 2010 @ 1:09pm
  
  Re: Penance and Public Relations Gambit?
  Funny, because I actually started respecting Amazon more for this move and made sure to buy more from them in the future. They're protecting my rights as a consumer against artificially inflated prices on digital goods. The prices publishers are going for with eBooks hurt consumers and also hurt Amazon and authors.
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- Ryan, 20 Apr 2010 @ 1:27pm
  
  Re: Penance and Public Relations Gambit?
  You write as though Amazon is doing an about-face here, but the two responses reflect exactly the same thinking: to protect their customers. How is that badly-thought-out?
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- Phillip (profile), 20 Apr 2010 @ 1:52pm
  
  Re: Penance and Public Relations Gambit?
  I agree with others here. I think this was a good move and I respect Amazon for it. The publishers are pushing to raises eBook prices which is bad for everyone as your friends are going to sell and any percentage of ~0% is still 0.00.
  
  The Authors weren't/aren't saying anything about this or if they are how its such a great idea. Sorry in my book that makes them complacent and if they got hurt by Amazon pulling physical books too, sorry but they chose their side...
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WDS (profile), 20 Apr 2010 @ 1:00pm

Why Any Information?
If Amazon is not required to collect sales tax, I don't understand what laws they are complying with by providing the other information.
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Danny, 20 Apr 2010 @ 1:04pm

Oh great...
So my dear old state won't join the lawsuit over the new healthcare bill (because no matter which side of it you're on I can agree that healthcare is at least something worth arguing about) but it will try to get access to all of my ordering information from Amazon.

As Mike says the only reason NC wants that info is so they can figure out how to change us for some sort of revenue for using Amazon.
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Overcast (profile), 20 Apr 2010 @ 1:21pm

Between this and red-light camera scamming - I'm be damn sure to avoid this backwards state.
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ElijahBlue (profile), 20 Apr 2010 @ 1:25pm

I'm really irked that Amazon turned over the personal data on what consumers in NC bought - they shouldn't have given over any of this information, even if the names and addresses remained confidential.
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MikeP (profile), 20 Apr 2010 @ 1:45pm

Idiots in NC
The idiots in NC have only to blame the voters. The government of NC is only doing what the voters want. Otherwise, the voters in NC would vote them out of office. I am sure glad I do not live in NC. It is time for the voters to stand up in this country and vote the bums out!
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- John Fenderson (profile), 20 Apr 2010 @ 5:05pm
  
  Re: Idiots in NC
  "It is time for the voters to stand up in this country and vote the bums out!"
  
  ... and just get a new batch of bums in. Voting is not sufficient (not totally worthless, but not sufficient.) We do not have much in terms of representation in our system anymore, as the new batch of politicians will have to kiss the same butts and grovel to the same deep pockets in order to get the money required to have any chance at getting and staying elected.
  
  What we need is to get rid of the need for large sums of money to get elected. Until that happens, it is virtually guaranteed that whoever is elected will represent the rich and the corporations, not you and I.
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gresch (profile), 20 Apr 2010 @ 1:46pm

north carolina tax
I also do not support states doing anything like this....
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bc (profile), 20 Apr 2010 @ 1:49pm

Roy Cooper
This sounds like something the state Attorney General would pull.. Roy Cooper. He seems to have a continuous desire to keep his name out there, in an effort to further his political aspirations for a higher office. Geez... I'm going back through my mind now, wondering what books I might have ordered from Amazon that could be misconstrued as having purpose... Amazon is right - not for me, but I imagine for many, it could have a "chilling affect." What an invasive course for NC....
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McKay Salisbury, 20 Apr 2010 @ 1:52pm

Use Tax is constitutional
Ima Fish mentioned that the use tax is unconstitutional, because it requires an impost on stuff coming from other states.

It is not unconstitutional because the state is charging sales tax on anything used in the state. It's the same tax rate without regard to where it was purchased. It would be unconstitutional if the state said that anything purchased outside of the state had a higher tax rate.

Two statements were made by Ima Fish:
"If I leave my state and go to New Jersey and buy something, I do not have to pay an import tax in my state.

"If I pay someone to go to New Jersey and buy something for me, I do not have to pay an import tax in my state."

In both cases you have to pay a tax, but it's not an import tax, per se, it's just the regular sales and use tax.
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- Phillip (profile), 20 Apr 2010 @ 1:57pm
  
  Re: Use Tax is constitutional
  it is not the same it is very clearly an import tax and double dipping by politicians.
  
  If I buy A book in NJ for 10.00 and pay 5% tax I just paid 10.50, but now I have to pay NC another 5% use tax so now its 11.00.
  
  If I buy the same book in NC for 10.00 and pay 5% tax I pay 10.50 total.
  
  They are charging extra to buy something out of state that they have no right to do.
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  - Avatar28 (profile), 20 Apr 2010 @ 3:27pm
    
    Re: Re: Use Tax is constitutional
    @phillip
    
    If I buy A book in NJ for 10.00 and pay 5% tax I just paid 10.50, but now I have to pay NC another 5% use tax so now its 11.00.
    
    If I buy the same book in NC for 10.00 and pay 5% tax I pay 10.50 total.
    
    If it worked that way then you would be correct, however I don't believe that it does. Instead I believe that you are responsible for paying the DIFFERENCE in tax. I.e. if your neighboring state charges a 2.5% state tax rate and your state has a 5% state tax rate then you are responsible to pay the difference of 2.5% to your state. I believe it only deals with the state tax rates as well, not the local tax rates.
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Reason2Bitch (profile), 20 Apr 2010 @ 2:09pm

Technicality rather than principles
First, if you are opposed to sales tax then you should advocate removing it (You live in CA. Protest there to repeal one of the highest sales taxes in the country). Not just oppose it on internet purchases.

The next issue is who should receive it (if it right to tax at all). Is it the state of the seller or the buyer? If infrastructure is considered then I think the tax should go to the seller's state. I am not yet convinced though. Any arguments for or against? Note that states do tax out-of-state purchases. Is that right? Same principle should be applied to internet purchases also.

Unless these issues are settled I think it is premature to talk about NC Amazon issue. Let us assume NC deserves to collect taxes how can it get it back without Amazon's help? Or how does it deal with any out-of-state in-person purchases?
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cj (profile), 20 Apr 2010 @ 2:20pm

look at the times
Many of your States right now are trying to dig money out of every nook and cranny they can find. Quite a few States are shutting down programs, laying off, and even schools are suffering from no funds. This doesn't make what NC is doing right. It isn't right! Maybe look at the whole picture, and see if there is a better way for States to survive the economy.
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- Ryan, 20 Apr 2010 @ 5:28pm
  
  Re: look at the times
  Quite a few States are shutting down programs, laying off, and even schools are suffering from no funds. This doesn't make what NC is doing right. It isn't right! Maybe look at the whole picture, and see if there is a better way for States to survive the economy.
  
  Yes, the best way is to shut down programs, lay off public employees, and cut funding to schools, which are the exact things that put them in the hole in the first place. The government should not be involved in about 95% of their programs, the public sector is bloated by about a factor of 20, and education funding has absolutely exploded through the roof in the last few decades in return for essentially zero progress - because teacher unions have hijacked the system. But states would prefer to avoid that by raising taxes; it's like we keep excising healthy tissue to avoid having to cut out the tumor.
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The Buzz Saw (profile), 20 Apr 2010 @ 2:20pm

LOL @ taxes
I remember arriving at the tax form that requested a list of all purchases I made online. The funny thing about this is that I could not be honest about it even if I wanted to. I buy so much stuff from so many vendors online, there is no practical way I could gather up that information. And what incentive do I have to hunt down this information? So that I can pay more in taxes? Not very motivating...
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AW, 20 Apr 2010 @ 3:30pm

massachusetts is trying to do this same thing to NH. NH told them to go to hell. I for one will never pay sales tax on something I buy online. When my state stops giving my deadbeat neighbor welfare for not keeping her legs closed and free cars so people will have hte motivation to keep a job then we can talk.
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Radjin, 20 Apr 2010 @ 4:06pm

Revenue
It would seem that if a state would like to increase its revenue, it might be so inclined to work at enticing companies to come there, increasing jobs and of course taxable income. One big way is to not tax companies out of the state. It's been proven time and again that a states income increases by lowering taxes. A little from everyone is much better than a lot from a few.
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- slander (profile), 20 Apr 2010 @ 5:42pm
  
  Re: Revenue
  Quite a while back, Los Angeles lowered business and property taxes to lure companies from the Bay area to come down. It worked. For a while.
  
  Then they jacked up the taxes, so a whole boatload of companies left town. Many moved to San Diego, many moved back to San Francisco.
  
  The last few years, San Diego's jacked up the business and property taxes (along with a number of other really stupid, short-sighted moves...) and a whole bunch of businesses are either leaving or closing up shop.
  
  It seems they never learn...
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  - ElijahBlue (profile), 20 Apr 2010 @ 9:23pm
    
    Re: Re: Revenue
    L.A. just rolled back the city business tax, but only after the few remaining tech-related employers in the city warned the mayor the moving trucks were on the way. If you can call yourself an internet or multimedia business with a straight face, you probably qualify for the lower tax rate.
    
    http://mayor.lacity.org/PressRoom/PressReleases/LACITYP_009351
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Anonymous Coward, 20 Apr 2010 @ 5:25pm

So Amazon is to leave NC for greener pastures?
So Amazon is to leave NC for greener pastures? What would come of all the graft and tax breaks they gave Amazon to come in the first place. The politicians that ran any corporation out of the state would have lots of 'splaining to do.
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- Bengie, 21 Apr 2010 @ 10:08am
  
  Re: So Amazon is to leave NC for greener pastures?
  If a company has a physical presence in a state, then they must charge that state's sales tax. If they are not charging sales tax, then they must not be in NC.
  
  It's not that Amazon is leaving, they're already not there.
  
  What is NC going to do, ban UPS and FedEX from delivering Amazon products? That'd got over well.
  
  Since Amazon is in another state, NC can't force them to do anything so long as they're not breaking federal law.
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abc gum, 20 Apr 2010 @ 5:31pm

Another in a long list of reasons to not live in NC
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big al, 21 Apr 2010 @ 7:05am

you know what would be funny??? send NC the info they want and the same info from all 50 states on hare copy...."Here's the information you asked for!!! Where do you want these 10 trailers to unload?"
also it seams to me that looking over that info would cost more than the income it would generate.
2 cents worth
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robphelan (profile), 21 Apr 2010 @ 8:00am

Re: Re: Amazon already gave away too much info
None of this information is personally identifiable. There is no way to 'disaggregate' the information to correlate it with a specific buyer without further information. Unless, you know, you're the only one that lives at that particular postal code.
Are you kidding me? are you new to this site or just haven't been paying attention. It has been reported time and time again about how supposed non-identifiable information can lead straight to the "non-identifiable" person.
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known coward, 21 Apr 2010 @ 8:16am

Like it or not NC has a right to the sales tax
But, they do not have a right to know what it's citizens are reading and buying.

The simple answer is to force online retailers to collect the sales tax from the customers based on where the sale is made.

That way NC does not intrude on the first admendment. and they get the sales tax they are legally entittled too.
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Anna, 27 Oct 2010 @ 12:36pm

TAXES TAXES TAXES
Do the Political Families have anything else to worry about then taxing us to death over a purchase over the internet. Thanks to them, families are without jobs, pay too high of taxes now and billions of people can't afford to buy anthing. I see the issue, that is less money they can put in their pockets or give themselves as a raise. It is pure disgraceful our government stoops this low. People who worked for a living but lost there jobs can't get government help if you have a piece of land in your name or a car, but lets encourage babies to have babies and we will pay for their food, medical, housing, lights, daycare and provide transportation service at our expense. BUT THEY ARE WORRIED ABOUT THE WORKING PEOPLE, PAYING TAXES ON OUR EARNED INCOME ONLY TO BE TAXED TO DEATH ON EVERYTHING ELSE, BUYING SOMETHING ON THE INTERNET. Maybe they should rethink their priorities before all Americans are in ths streets.
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Josie Newman, 14 Jun 2012 @ 6:51am

NC demands on Amazon
We all know that the system is broke. NC, like most other states, want to tax items on top of the tax that was charged on the product to begin with. Lets say I bought an item in NC and have paid the NC sales tax on the item, and I would like to sell that item. I tested it, didn't like it, and want to sell it. I've paid the NC tax on that item already? Isn't that double taxation? NC government has serious money issues anyway.The only way out of this fix is for Americans to start making some noise. We, as citizens of the US, need to really start looking at the people we vote on to represent us. Yes, they are people just like we are, but it's funny how politicians may break the law and get off stock free. An average tax paying citizen would have the book throw at them. Many of these politicians are lawyers and live in their own lawful society. Just look at what the verdict was with John Edwards. I wonder who worked that magic? We live in a time that we no longer have sound beliefs, and feel like the government will take care of us. Very soon, our government is going to become a dictator telling us what we can and can't do. I really believe that there are more important issues that NC needs to address. From what I see and hear on the News,North Carolina has serious treasury issues, and need to balance their budget and find ways to stop spending more money rather than trying to figure out how to tax people to death.
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