Amazon v. North Carolina: taxes on internet purchases, or “Big Brother” in N.C.

Amazon Headquarters in Seattle

One of my favorite things about Amazon–other than that I can shop and never have to leave my desk–is that I can avoid paying taxes on my purchase (as well as shipping, if I can buy enough books, which, honestly, is almost never a problem.  Quite the contrary.  But I digress…).  There have been several attempts by states to capture back taxes lost to Amazon as a result of online sales.  See, if the books were sold from Barnes and Noble, or Borders, or some local bookseller, there would be no argument–sales tax would be added to any purchase and paid to the state tax commission as a matter of course.

The internet, of course, has no such restraints.  And now comes North Carolina to try to get back some portion of the purchases that occur on Amazon’s website by consumers in the state.  Amazon, a Washington company, asserts that North Carolina has no right to the tax.  A few years ago, when North Carolina tried this before, Amazon closed down all of its storefronts in the state in order to avoid any tax liability.  Now, in a new thrust, North Carolina is demanding that the online retailer provide records on what was purchased by consumers in the state since 2003.  That amounts to over 50 million purchases, no small number. While North Carolina law requires consumers to pay taxes for online purchases  if buying the same item in a store would result in a sales tax, out-of-state retailers–like Amazon–can’t be forced to collect North Carolina’s tax if it has no physical presence in the state. Hence, the demand for all information on purchases since 2003.

Foul, cries Amazon, and a violation of  Amazon’s customers First Amendment rights. In order to head off the action, both in North Carolina as well as in other states, Amazon filed suit in US District Court in Seattle.  From the AP:

Amazon said disclosing the names and addresses of buyers, as requested, would harm customers who may have bought controversial books or movies. In a federal lawsuit filed in Seattle, the company also expressed worries that the disclosures would diminish future sales.

Amazon wants the court to rule that North Carolina’s collection effort “violates the rights of Amazon to sell, and its customers to purchase, books, movies, music, and other lawful expressive content free from government intrusion into the customers’ reading, viewing and listening choices.”

Amazon is asking the U.S. District Court in Seattle, where Amazon has its headquarters, to find North Carolina’s request unconstitutional. The company said federal action would avoid varied decisions in multiple courts “in the event other states make similar demands for customer data.” The lawsuit was filed Monday.

One can’t help but hear echoes of “Big Brother is watching” in North Carolina’s actions.  And I’m not the only one who thinks so.  Patrick over at Popehat eloquently channels Orwell for his opposition to North Carolina’s apparent intrusion into its citizens’ purchase habits.  And it sounds like he will be taking action.

As a North Carolina citizen, I have decided that in November I shall vote against every single incumbent politician on the ballot.  I won’t throw away my vote on third parties.  I’ll vote for the candidate most likely to unseat the incumbent, no matter how well-meaning a fool the incumbent may be.

Just when I thought it couldn’t get any worse for incumbents this year, North Carolina has proven me wrong.

George Orwell, author of "1984"

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One response to “Amazon v. North Carolina: taxes on internet purchases, or “Big Brother” in N.C.

  1. I just was reading about this in my business law text. Thanks for the information and application to what I am learning.

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