Amazon Fights For Privacy of Customer Records 272
Posted
by
kdawson
from the taxing-demands dept.
from the taxing-demands dept.
suraj.sun notes a CNET article on Amazon's lawsuit against North Carolina on the grounds that the state is trying to violate the privacy and First Amendment rights of Amazon's customers. "Amazon.com filed a lawsuit on Monday to fend off a sweeping demand from North Carolina's tax collectors: [for] detailed records including names and addresses of customers and information about exactly what they had purchased. ... 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 [state's] 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." Amazon is arguing that the records of what books, music, and videos its customers bought deserve enhanced protection.
Re:NC is desperate for money (Score:3, Informative)
They can't force out of state companies to collect taxes for them. That would be illegal.
However the tax must be paid (akin to a customs fee) upon entering the state. But since there is no feasible way for the state to know what is passing into its borders, citizens are able to avoid paying the state sales tax (or use tax in this case).
The answer to your question is yes. They need the personal information to pursue the purchasers individually.
Re:A use tax is all fine and dandy... (Score:4, Informative)
The goods purchased may not all be taxed at the same rate, or some may be exempt. General catagories rather than specific titles may be acceptable, but a total dollar amount alone is likely insufficient for proper assessment.
Re:This is where the FTC could really step in (Score:4, Informative)
What isn't touched on in the article is that the NC state government is extremely corrupt in dealings with money. We already have the highest state income tax, sales tax, gas tax, property taxes and insurance rates in the region. Honestly, about 45% of my income goes to the above mentioned things. The rest go for cell phone (taxed), car payment (taxed), dog (taxed)... you see where this is going. Our idiot governor keeps making trips to Hollywood and China, trying to bring jobs to the state (really?); all she's doing is blowing $100k everytime she takes a trip like that. Amazon was the only way I could afford my text books when I was in college, seeing as how the STATE college charged 130% of the list price in their bookstore. NC needs to learn to make do with all the money they rob from their residents without taxing us on something else.
Re:I doubt Amazon cares much about our privacy. (Score:1, Informative)
Re:This is where the FTC could really step in (Score:5, Informative)
Not quite, though the distinction is sometimes subtle. If use tax applied only to goods purchased across state lines, then you would be correct that it would be a tariff between states and unconstitutional. However, it applies generally to any transaction where the seller is not obligated to collect sales tax on behalf of the state. This is irrespective of whether the seller is in or out-of state. If I sell my stamp collection to my neighbor for $500, I am not collecting sales tax on that transaction, and my neighbor should report that and pay use-tax on his state return. It doesn't matter if he boutght it from me, or from someone out of state. His obligation would be the same.
Re:Obviously, I hope Amazon wins... but (Score:5, Informative)
I do not relish the idea of having to build in a system for 50+ different sets of taxes.
Like it's only 50! Sales taxes can change along county and township boundaries. What is actually taxed changes too.
Re:All these states should be like New Hampshire (Score:1, Informative)
Sales tax!? Bah, if you give up schools and paved roads, you can do without it entirely.
We do!
Schools are paid for through property tax, while roads are paid for with gas taxes.
-A Free State Project [freestateproject.org] member.
Re:All these states should be like New Hampshire (Score:5, Informative)
Sullivan Tire. The MA SJC shot down the attempt, so I don't think it's much of a precedent. NH did pay close attention to this, various public officials said they would fight this matter to the end.
http://salestaxbuzz.org/2009/08/26/live-fee-or-die-vs-taxachusetts-how-story-ends/ [salestaxbuzz.org]
There was a slight difference. Sullivan actually had some stores in MA. I think MA was trying to use that fact to exert pressure on the chain to supply info on sales that took place in other states.
Reminds me of way back when MA used to send state police to NH to stake out the parking lots of liquor stores. They'd record MA license plates and radio cops along the border to pull those vehicles over for not paying tax on the alcohol they purchased. NH didn't want to lose the sales, so they sent out our own state troopers to remove the MA police.
The fun continues. Not too long ago a MA state rep was photographed at a liquor store in NH buying alcohol. The ironic thing was that he had just voted on increasing the liquor tax in MA. No laws broken, but it seemed a bit unethical to many. "Do as I say, not as I do."
Re:All these states should be like New Hampshire (Score:5, Informative)
Re:NC is desperate for money (Score:3, Informative)
Let me first say that IANAL.
Use tax is not a tax on interstate commerce. The state is not asking for any money specifically because the sale was across a border or from another state. Use tax is a tax on you as a purchaser and citizen of your state, levied by a state that has taxation authority over you, on items that you purchase for use in your state. When a seller collects it, it's called "sales tax". When you pay it yourself because you did business with a seller who does not have to collect it, it's generally called "use tax".
Sales taxes and "use taxes" (sales taxes not collected by sellers on your behalf) are really the same thing, just collected differently. They are owed by the purchaser who is subject to the laws of the state in which they live. Everything you purchase that you intend to use or consume in your home state is almost certainly subject to that tax (your state laws may differ, but I doubt it), regardless of where you bought it. Your state is free to pass a law that anything you buy for use within the state is subject to taxation. They can also pass laws that sellers who have a presence in your state (and are therefore subject to your state's laws) have to collect that tax on your behalf and remit it to the state. At that point, it is called "Sales Tax" and you have no paperwork to file. The money is added to your purchase and the seller remits it to the state, and everything is all legal.
If the seller you purchase your goods from does not collect that tax, then it's highly likely that your state laws still say that you have to pay it. You just don't have someone conveniently collecting it for you and forwarding it to the state. You have to pay it yourself. This is generally referred to as "use tax", though states may have their own term for it.
In my home state (Maine) we have a tickybox on our state income tax form that allows us to pay a small percentage of our income (something like 0.6% or something - it's a small amount) that is designed to replace any small purchases we make out of state. It's basically a "check this box, pay your $x, and you are absolved of any small items you've purchased and not paid sales tax on". The alternatives to that are to keep all of your out-of-state purchase receipts and remit sales tax on all of those purchases for which you did not pay sales tax (there's a form for that), or to break the law and skirt paying the sales tax you legally owe the state (there's a penalty for that, even though it's what most people actually do and chances are they'll never actually get caught at it).
Your state cannot impose laws on sellers in other states to force them to collect the taxes on your behalf. That does not absolve you, as a citizen of your state, of the obligation to pay taxes on things you purchase for use within your state under the tax code of your state. It just makes it less convenient for you to do so, and more likely that you will break the law by not paying that tax.
There may be some states that are OK with their citizens skirting their sales/use tax laws and buying things outside the state and never paying taxes on them. I don't personally know of any, but I've only lived in 4 states and one of them (New Hampshire) did not have Sales/Use Tax. The other three had very strict laws about paying taxes on everything you bought, no matter where you bought it. The fact that most people were ignorant of those laws (willfully or otherwise) does not invalidate the laws.
North Carolina (and, by the way, Oregon and a few other states) is looking for information on purchasers within their own states so they can start going after their own citizens for nonpayment of their taxes. That is invalid, to my knowledge (REMINDER: IANAL), since Oregon cannot pass a law stating that companies from other states have to disclose anything to them. Oregon would have to have the Federal government pass such a law, at which point Amazon would have to comply.
Re:Obviously, I hope Amazon wins... but (Score:5, Informative)
Yes, try something closer to 50,000 tax rates once you factor in county/municipal/local sales taxes, differing rates based on the item sold of which categories differ by state (a bag of potato chips sold here in Maine is considered a "snack" if it's a small bag and is therefore taxable, but "groceries" if it's a large bag and is therefore nontaxable, unless it is sold in a place that depends on prepared food sales like a restaurant for more than 50% of their income at which point it's a "snack" again).
Re:All these states should be like New Hampshire (Score:3, Informative)
It seems like the states with the lowest tax base got it figured out..strange.
Yes, it's called stealing money from California and other populous states. California gives more to the Federal government than it gets back. Those poor-ass states get more than they give. So the state where most of the people live (at least, more than any other state) and where most of the miles are driven (likewise) has the shittiest roads. Of course, there's plenty of corruption in California, but that doesn't set it apart from any other state.
Re:All these states should be like New Hampshire (Score:1, Informative)
So what you're saying is that progressive, "tax the rich" strategies are okay, as long as they take some other rich guy's money?
To the extent that the situation is real, it's entirely brought on by the states themselves: They've created a high cost-of-living that inflates their federal tax burden under our progressive system.
Having said that, these numbers are typically pathetic fictions. First, you need to throw out Social Security and Medicare. Yes, there may be some net transfer between high cost "blue" states and low cost "red" states, but that's more a function of how fixed income retirees live: How many people work minimum wage jobs in Wyoming and then retire to a penthouse in New York City? When you correct for the passage of time, it's not really a transfer from one state to another.
Next, at least one set of numbers double counts the deficit: They count the taxes currently paid, and then they assume that taxes will continue to be paid in the current ratio and apportion the deficit according to costs applied to current taxpayers. Finally, it's pretty difficult to apportion the cost of a federal project with any kind of accuracy.
Pop quiz:
For each question, list the states that are recognized as receiving federal funds along with the amount they receive.
1) University of New Mexico contracts with IBM and Microsoft to create a supercomputer composed of XBox 360 nodes (ASCI Red Ring of Death) in order to simulate nuke testing for the DoE. The total size of the contract is $10B, with $10M going to UNM and the remainder split evenly between IBM and Microsoft.
2) The DoD decides to buy 10 C-17 transports from Boeing ($2B). Boeing's headquarters is in Chicago, Illinois. Final assembly is in both Long Beach, California and Macon, Georgia. Fuselage sections are built by Vought in Dallas, Texas. Avionics come from Allied Signal in Phoenix, Arizona. Engines come from Pratt & Whitney in West Palm Beach, Florida. P&W's headquarters are in Connecticut.
The feds can tell you down to the zipcode where the primary contractor is, but they don't account for how much money the primary might spend elsewhere. In the first case, New Mexico would be seen as "stealing" money, when the reality is that nearly all that money goes on to other states. In the second case, Illinois is the "thief", when most of that money wends its way elsewhere.