subject: Amazon Wins on Taxes—for Now [print this page] Amazon Wins on Taxesfor Now
A Recent Ruling Shuts Down North Carolina's Attempts to Demand Sensitive User Information from Amazon
The First Amendment wins Amazon's court battle with the state of North Carolina, at least for now. Despite a speedy ruling in favor of the online company by Seattle Judge Marsha J. Pechman, North Carolina may still appeal the decision that protects Amazon from giving up sensitive user information that the state claims it needs to calculate taxes. The dispute started in December 2009, when the North Carolina Department of Revenue requested information on around 50 million Amazon shipments sent to North Carolin addresses between 2003 and 2010. Amazon gave the state a detailed record of the purchases, but did not include customers names' and addresses. Three months later, North Carolina asked for this sensitive user information and Amazon refused, instead filing a suit
against the state one month later. The suit was recently settled in favor of Amazon, on the basis of customers' privacy protected by the First Amendment. This isn't the only struggle states are experiencing with online retailers. Many state revenue departments are searching for ways to collect taxes on transactions with out-of- state retailers. Currently, a Supreme Court ruling limits states from collecting taxes on transactions with companies who do not have a physical presence in the stateas in the case of most online companies.
The decision could still be overruledbut Pechman's recent (and quick) ruling in favor of Amazon could very well slow down the progress of overturning the ruling. While Pechman was careful to word her ruling so that Amazon (and other online retailers) are still obligated to comply with state tax laws, the decision is definitely a bolster for the ongoing dispute between online retailers and state revenue departments.
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