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.
NC is desperate for money (Score:5, Insightful)
Not that this is an excuse, but because the NC government won't play triage with projects and cut what it can tolerate so the budget is experiencing a shortfall again in the billions.
Re:This is where the FTC could really step in (Score:5, Insightful)
A means to an end... (Score:5, Insightful)
I would think that this is North Carolina's way to have amazon.com to start collecting taxes when items are shipped to their state. It's a force move.
Logically, there would be way to much spent then collected IMO. The state would have to track down each customers tax returns for (they can only go back a certain amount of time for an audit and I though it was 5 years, not 7 which NC wants), and then correlate the data to either ensure that the taxpayer claimed the items or did not claim the items. Then the state would have to calculate taxes on said items, or see if it affects the effective tax rate for said taxpayer, then tack on interest to those monies, then notify the taxpayer if the state can find the tax payer (moved since filing, died, etc...).
Another question would be how the state came up with the number of purchases from amazon.com to their state?
A use tax is all fine and dandy... (Score:5, Insightful)
Obviously, I hope Amazon wins... but (Score:5, Insightful)
I sincerely hope Amazon wins, but it seems to me that without some kind of federal-level intervention, more and more states are going to push to get online / mailorder merchants to collect their taxes.
Amazon's big enough that if push came to shove, they could probably implement a sales tax system based on delivery address that could cover all 50 states and the territories.
However, what really scares me is that this would be a death blow to a lot of smaller online and mail order retailers. I built a catalog and shopping cart system for a friend who had a business model that just didn't quite fit existing off the shelf models, and I have to say that I do not relish the idea of having to build in a system for 50+ different sets of taxes. However, that task is childs-play compared to the accounting nightmare my friend would have in having to fill out forms and remittances to all those different jurisdictions. She gets by, but doesn't exactly have a huge margin... the extra complication of collecting for all those jurisdictions and time/effort needed to deal with it could tip the scales on whether her business continues to be profitable or not.
So, this isn't really about one state being greedy - it's about the camel's nose under the tent.
Sooner or later, someone will suggest that the federal government charge some modest tax (say 5%) on all online / mailorder sales, then distribute the funds to the states based on their share of the delivered sales.
Of course, the federal government would probably not be able to resist getting THEIR hands on the money and we'd either end up with an insane rate with the federal government back-dooring a national sales tax in, or the states complaining that the rate needs to be higher since they're still "losing money" versus collecting their full state sales tax.
This is just an ugly situation all 'round.
Personally, I would think that the success of online retailers is at least partly due to the largely tax-free nature of sales transactions. I doubt we'd see sales taxes kill e-commerce, but I can see it hurting small e-tailers and having a bit of a downward pressure on sales as it'll be eating into the spending power of the buyers.
Re:This is where the FTC could really step in (Score:5, Insightful)
Re:NC is desperate for money (Score:5, Insightful)
I doubt Amazon cares much about our privacy. (Score:3, Insightful)
They're just using this as a legal reason not to release their customer records. If you could cite a constitutional amendment to get out of a tax audit wouldn't you?
Re:Obviously, I hope Amazon wins... but (Score:1, Insightful)
Which is why I personally have no problems with our VAT rate of 19%. Sure it's a fifth of the price tacked on but at least it's ALWAYS that unless it's either a vital requirement for living (such as foodstuffs, only 6%) or specifically exempted stuff, which the ordinary citizen doesn't have to worry about.
There really is no problem with a known fixed rate. It makes it easier for businesses to administer, costs less overhead when doing the books (Can I eat it? No? 19% it is) and the IRS doesn't care to much when you're a few euro's off.
And no, small online retailers don't get disadvantaged from a flat tax anymore than te big boys do. The easier you make it on the entrepreneurs, the more they can do with their money, big or small.
No, the problem with your tax system, as you put it in the first paragraph, is the complexity of it. Not the rates.
Re:NC is desperate for money (Score:1, Insightful)
Re:A means to an end... (Score:5, Insightful)
Re:Obviously, I hope Amazon wins... but (Score:4, Insightful)
Re:Obviously, I hope Amazon wins... but (Score:2, Insightful)
Good luck Amazon, as Al Capone found out, you can get away with murder, but you can't beat tax evasion.
Why when it comes to taxes you are guilty until you prove yourself innocent, and then you are still guilty anyway?
Re:keeping records? for how long? (Score:3, Insightful)
Don't think I've heard of that. I'm pretty sure, at best, there are limits on how long they are required to keep the records.
Re:keeping records? for how long? (Score:2, Insightful)
Re:This is where the FTC could really step in (Score:3, Insightful)
Fix -what- locally? Demand smaller gov't, and less taxes? Done!
That really worked well during Bush's 8 years, didn't it?
Re:One click taxation (Score:5, Insightful)
Re:NC is desperate for money (Score:5, Insightful)
In short: "I do not like the government spending money on stuff I don't like (sports stadiums). They should be spending it on things I do like (state parks)."
More like: "I do not like the state spending money on funding new private commercial enterprises that traditionally lose money. They should be spending it on maintaining existing state-owned properties, held in trust by the state for its residents."
Re:This is where the FTC could really step in (Score:5, Insightful)
Re:This is where the FTC could really step in (Score:4, Insightful)
I think you'll find that many Tea Partiers are just as angry about the Bush era as the liberals are. Some certainly would like to revert back to Bush era government, but as with any political group the membership represents a spectrum of beliefs.
The real tea party movement lacks strong consolidated leadership by design, its one of the things that the movement pushes for in government. The problem is that allows many of the fringe members and rallies to be co-opted by traditional conservatives who like to think of themselves as leading a patriotic charge in the name of the people. People like Sarah Palin and other fox-news bobbleheads can easily step in because there is no single charismatic figure there to keep them out. This is unfortunate, because in the minds of outsiders it paints tea partiers as gun nut ultra conservatives that want to send another Republican to the white house. To many of us, this is the opposite of true.
Re:Obviously, I hope Amazon wins... but (Score:2, Insightful)
Re:Get rid of sales tax (Score:0, Insightful)
GREAT idea! NOT! Just last week it was reported that almost 50% of the country pays NO federal taxes. In fact, many people actually turn a profit on tax day. This is immoral, and completely driven by the envy of people who want all the trappings of success, without having to get up off of their lazy asses to work for it. What we need is the complete OPPOSITE of what you suggest - a consumption tax only. This way everyone has some skin in the game on election day. The more you consume, the more taxes you pay. It's a self-regulating progressive income tax. Even pimps and drug dealers will have to pay some taxes under such a system.
Re:What Amazon needs to do ... (Score:3, Insightful)
I would rather keep my ability to log in at any time and see my own entire purchase history.
Re:This is where the FTC could really step in (Score:4, Insightful)
I've been thinking that the media has greatly misrepresented the Tea Party movement. The reporting makes the Tea Party look so nutty that I begin to doubt it on the grounds that no group of people sharing a common interest or three could be quite that incoherent, contradictory, and plain stupid.
There are a bunch of problems with taxation that make perfect sense to protest. Taxes are overcomplicated. An excellent example are these Taxsaver plans, in which taxpayers are asked to estimate what their medical expenses will be, and if they guess wrong, they pay more, and think it's their fault! Guess too low, and pay tax on the difference, or guess too high and simply forfeit that difference to the government! That's the sort of crap cell phone providers pull with their confusopoly. Another is the double standard in which the government pays no interest if they withheld too much money from your pay, but if it's the other way around, you pay a "penalty" calculated at a very high rate of interest. Rather like what credit card issuers do. For decades now, American politicians have been abusing the tax code to implement policy because they think that's an easier way to slip things past the public. This is why people are so angry with Congress and what I think the Tea Party is really about. They weasel extra money from the public with all this dirty pool, then they insult our intelligence by acting as if we don't see it, and then they blow most of the money on pork and unfair regulation designed to sneakily transfer wealth to their "friends" while the rest of us are left out. Taxes that are unexpected because they violate the norms and the law are unfair. I lived in NC briefly, and had no idea there was a "use tax" on items from out of state, until tax time. If someone ordered thousands of dollars worth of merchandise, it's possible a surprise tax like that could catch them without enough money on hand to pay in time, because they didn't know and had no reason to inquire about such a possibility. If this tax is legit, then Amazon should collect the tax for NC at the time of sale. Either way, NC should not be allowed to engage in a fishing expedition.
Re:Property taxes fund the majority of schools (Score:3, Insightful)
I've been 4 years now without a raise, despite being a dedicated and productive employee (I did no programming when I started, and now I am, yet I'm still making the same salary). I've been with the State for 10 years now, and of those 10 years, the only raises I've seen that weren't from me changing jobs were ~3% COL increases, which has happened 4 times. That's pretty crummy, considering the absolutely insane amount of growth the state saw over the past decade.
Welcome to the real world son, I've worked at my current job for 3 years, seen one promotion and a job change, and not a dime of extra pay - no COL, no nothing. I even saw a 5% cut when the economy went south. All that, and relatively speaking I have a good, secure job.
I'd be pretty happy with your 12% raises in the current economic climate.
Very few private companies have plush retirements that match State retirements. Of those that did have them, like GM, they've been getting rid of them.
My last employer even had a convoluted sliding-scale 401k matching system - they'd match up to 6%, but you'd have to put in 12% of your income to get that, and it took three years to get vested. My current employer is a bit better about that - matching % for % up to 6%, but that's still not as good as most State pensions.
The upside to public employment is you've got to really suck to get fired. It's almost unheard of. The only time you really see public employees get fired is when they screw up so bad that the public is made aware of it, and is demanding their head. Then it's a tossup. This is why government jobs tend to be filled by either idealists or nincompoops. It's not universally true, but it's common.
Re:All these states should be like New Hampshire (Score:4, Insightful)
The states are going after the wrong companies in trying to collect data for assessing use taxes. I get that they're going after the big fish like Amazon in an attempt to convince smaller retailers to comply of their own accord, but that still means collecting data from tens if not hundreds of thousands of sources. And given decisions like the one you referenced, they're not likely to get anywhere near 100% reporting from retailers, especially when states have a vested interest in protecting the rights of their own businesses...after all, more online vendors located in their own state means more tax revenues from those businesses.
The much simpler solution would be to deal with the credit card companies. There's relatively few of them and they've got data on nearly every out-of-state transaction. What they don't have is a breakdown of the transaction including items purchased and shipping costs, but it's enough to know whether taxes should have been collected or whether the resident should be declaring use taxes. Using data from the credit card companies, the states can come close enough to decide whether the resident has been truthful in his or her use tax reporting and whether or not the resident should be selected for audit.
And the credit card companies should be easier to deal with since they can likely be enticed or threatened by possible legislation governing how they do business in the state (i.e. personal bankruptcy laws, credit card terms disclosure, limits on excessive fees, etc.)