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Comments: 0 Views: 39This from cnet news: 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. ...
“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.
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. ...
“Amazon must either comply with the (tax collectors’) information request and violate the privacy and First Amendment rights of Amazon and its North Carolina customers, or refuse to comply with a request from a state agency that has stated its intention to issue an administrative summons,” the complaint says. It adds that there is “no discernible need” for tax collectors “to know the identities and other personal information linking specific customers with any purchase, much less purchases of books, movies, music and other expressive works.”
Thanks to Rich Rennicks for the link to this story.
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What the state hopes to gain here is hard to understand on a practical basis. Do they actually think they can afford the expense of checking every tax return against Amazon’s sales records? Can this possibly be practical? |
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Ken, I think the state wants to collect sales tax from the “affiliate” online businesses that are located in NC. The state is arguing that it deserves to collect sales tax on any sales transaction resulting from a visitor to one of these NC affiliate sites who then clicks on an Amazon link (or any other such link) and proceeds to purchase something. The referral to Amazon or other out-of-state online sales outlets, the state says, is the creation point of the sale. So the state would be going after the affiliates rather than the individuals making the purchases. |
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So theoretically speaking, if NC were to collect taxes from Amazon, wouldn’t they be collecting double taxes considering NC residents are also required to claim those out-of-state purchases under the use tax? |
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I don’t understand why N.C. feels that it has the right to collect sales tax on items not sold in N.C.. Seems wrong to me, because, that is the law, I believe. And that is what they want from Amazon. I think that if I go and buy a refrigerator in Tennessee, N.C. wants the tax revenue from it. |
who
Apr 22, 2010
at 09:49 AM
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@Jeff - The problem with that theory is that NC affiliates [who were all cut from Amazon’s affiliate program last summer due to this law being put into affect] already pay NC state taxes on the affiliate money they earn. If an AZ affiliate earns $30,000 a year in income from being an affiliate, that is reported as income to the state. An affiliate refers people to Amazon - they get a small cut [usually 4%] of the sold price of any item that someone who clicks on their affiliate link. The affiliate does not ship the product, handle any customer service or anything with the item - they simply refer someone to Amazon and Amazon makes the sale. I think the debate is the “creation of the sale” - is it when someone clicks an affiliate link, or is it when they decide to click “buy” on Amazon’s site, regardless of how they got there? /vjl/ |
Vince LaMonica
Apr 22, 2010
at 12:10 PM
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This is perhaps a preface which will introduce discussion of VAT. |
trobinson
Apr 23, 2010
at 10:09 PM
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Ken Hanke