Amazon Moves To Guard Customer Data From North Carolina
Apr 30 2010
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Amazon.com Inc. has filed a complaint seeking to block an effort by the North Carolina state government to force the company to turn over personal information for residents who have purchased anything from the company since 2003.

Amazon's complaint stems from the state's effort to audit the company's compliance with state sales and use tax laws.

Amazon contends the state does not need personally identifiable customer information to audit the company and to do so would violate its customers' privacy.

Last year, North Carolina followed New York in passing a law that required out-of-state retailers to collect sales tax in the state if they have marketing affiliates--people who earn a fee for providing links to online retailers on their own Web sites--in the state. Amazon responded by severing ties with affiliate marketers in North Carolina, and currently doesn't collect sales tax there.

However, North Carolina officials said earlier this year they were still discussing other ways to collect sales taxes from online retailers, including asking e-tailers to pay back taxes for sales that happened even before its law went into effect.

Amazon said it has already has cooperated fully with the audit, providing the state's Department of Revenue with voluminous information about nearly 50 million items sold to North Carolina customers, including order numbers; the city, county, and zip codes to which items were shipped; transaction dates and prices, as well as Amazon's standard product code for the items.

Amazon has asked the court to declare the state's demand for personal information violates the company's and its customers' First Amendment rights, as well as the Washington State Constitution and federal law.

"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," said Amazon spokesperson Mary Osako.

The battle over sales tax for e-commerce has also spread to other states. Earlier this year, Colorado passed a law that requires e-commerce sites to either collect sales tax or share information with the state about purchases made by residents, ostensibly so that it can require those consumers to pay. North Carolina's move could be part of a similar effort by its tax officials to gather data that could force its residents to pay so-called "use tax."

Adapted from Source: www.foxbusiness.com, 19 April 2010