Sales tax collectors demand Amazon records

Amazon is resisting an attempt by North Carolina tax collectors to pry out purchase details, names and addresses for every resident who’s bought something from the retailer since 2003.

North Carolina’s Department of Revenue wants Amazon to turn over all the details on roughly 50 million purchases made by state residents. Amazon has sued the department, arguing that the demand violates privacy and First Amendment rights, CNet reports.

Under the First Amendment, U.S. citizens have the right to purchase books anonymously. There’s also a law called the Video Privacy Protection Act, which bars movie sellers from disclosing customer information to anyone.

The department won’t say why it wants residents’ purchase information, but the reason seems pretty obvious: Because Amazon doesn’t have a physical presence in North Carolina, customers from that state don’t have to pay taxes during the transaction. Residents are still obligated to report their online purchases at the end of the year, and pay taxes on them, but most people don’t. Enforcement is difficult, if not impossible, without cooperation from Amazon.

The funny thing is that other states are passing legislation that forces Amazon and other online retailers to cooperate without revealing information on specific purchases. In Colorado, retailers must send customers a list of everything they bought in a year, and then report the total purchase price to tax collectors. Other states including California and New York and considering similar laws. So it’s not clear why North Carolina wants such detailed information instead.

No one wants to pay more money during tax season, but I can’t fault states for going after the money they deserve, but asking for details on every purchase clearly steps over the line. I’m glad Amazon is fighting North Carolina, and hope the retailer wins and sets a precedent for other states.