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Print 35 comment(s) - last by The Raven.. on Oct 15 at 12:39 PM


NC gonna get paid, privacy be damned
NC wants names, addresses, and products purchased for all NC amazon customers

One of the longest running battles between states and online sellers has been the desire for states to capture sales tax revenue on purchases made by its residents. As it is today, taxes are not automatically recovered by a company online unless it has a physical presence in the buyer's home state. State residents, however, are supposed to report these purchases on their state tax returns.

One of the states pressing the sales tax issue the hardest is North Carolina. NC filed a suit against online giant Amazon in April of 2010 seeking to recover what it claims to be $50 million in sales taxes that were not paid by citizens on purchases dating back to 2003. Amazon sued NC in an effort to block the request by the state for Amazon to turn over information about the buying habits of people living in NC on grounds that the information would violate the user's privacy.

Amazon and its customers in NC are getting some help in the legal suit by the ACLU with the group set to go to court this week in Seattle. The ALCU will fight the state's request for specifics on what NC customers purchased online, including names and addresses of the buyers. According to the NC Revenue Department, it, for example, is not seeking specifics about what book a customer purchased, but only wants to know if the customer purchased a book or a CD.

Amazon states that it has already provided the state with purchase details as requested without providing any information about what each of the customers actually purchased. Amazon says that if it turns over names and addresses of the NC residents who made purchases that the state would be able to link the buyer to a specific product purchased.

The ACLU wrote in a statement, "The American Civil Liberties Union will be in federal court in Seattle Wednesday, October 13 to argue that requests by the North Carolina Department of Revenue (NCDOR) for detailed information about purchases made by Amazon.com customers are unconstitutional because they violate Internet users' rights to free speech, anonymity and privacy."



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i wonder
By kattanna on 10/13/2010 11:18:52 AM , Rating: 2
i wonder how much longer till it is all online stores have to charge the appropriate states sales tax, even if they dont have a physical presence.

i cant imagine too much longer




RE: i wonder
By Spivonious on 10/13/2010 11:23:30 AM , Rating: 2
It's the only solution that makes sense, since consumers are obviously not going to voluntarily pay the sales tax on their own. I wonder how much of this is the cause of so many states being on the verge of bankruptcy.

Of course, it could just be a problem of education. Most people believe that internet sales are tax free. Maybe if they knew otherwise they'd report the sales and pay the tax.


RE: i wonder
By kattanna on 10/13/2010 11:36:35 AM , Rating: 4
quote:
Maybe if they knew otherwise they'd report the sales and pay the tax.


LOL man, thanks! i havent laughed that hard in a bit.


RE: i wonder
By geddarkstorm on 10/13/2010 12:34:52 PM , Rating: 5
quote:
I wonder how much of this is the cause of so many states being on the verge of bankruptcy


Yes, it is obviously that and not all the overspending fiscal irresponsibility performed by some of the state governments. Not all of them are into the whole deficit spending craze though, and those that aren't, are doing completely fine. Yet, obviously, it's all about internet sales tax. Right.


RE: i wonder
By AlexWade on 10/13/2010 1:21:04 PM , Rating: 4
The Supreme Court ruling of Quill Corp v. North Dakota states that internet state sales tax is illegal unless the business has a nexus, a physical presence, in that state. Use taxes are different, but state sales taxes for interstate commerce are illegal.

Which only makes sense because each state has a measure of sovereignty. Thus the laws in one state do not apply to another state. A business with no physical presence in a state is not subject to another state's laws.


RE: i wonder
By Spivonious on 10/13/2010 1:54:22 PM , Rating: 2
Sorry, I meant use tax above. Although in PA at least, they are the same rate.

If I buy a soda in Delaware (no sales tax), but don't drink it until I'm in PA, I owe the state 6% of the purchase price. If I drink it in Delaware, I don't owe them anything. If I buy it in Maryland (let's say they still have 5% sales tax), and drink it in PA, I owe PA 1%.

I'm sure other states are similar.


RE: i wonder
By jbwhite99 on 10/14/2010 10:56:39 AM , Rating: 2
North Carolina has a use tax as well - the same 7.75% rate (5.25 state, 2.5 county) as sales tax is collected.

Sovereignty is actually challenged, since UPS has locations all over the state, and Amazon did have B&M folks to some extent with their affiliate program.

Bev, go find some other place to get your money.


RE: i wonder
By mattclary on 10/13/2010 1:25:46 PM , Rating: 3
quote:
I wonder how much of this is the cause of so many states being on the verge of bankruptcy.


No, that is caused by over-spending.


RE: i wonder
By The Raven on 10/15/2010 11:32:12 AM , Rating: 2
quote:
Of course, it could just be a problem of education. Most people believe that internet sales are tax free. Maybe if they knew otherwise they'd report the sales and pay the tax.


Oh great... I should've been paying tax on all that crap I bought on Craigslist? I'm gonna change my name and assume a different identity. I can't afford all of that!


RE: i wonder
By HrilL on 10/13/2010 1:02:42 PM , Rating: 1
This should already be the case. Since people assume they don't have to pay sales tax online. This gives companies like Amazon an advantage over local state businesses. This makes it so online businesses don't have to complete on the same level and that's not right.


RE: i wonder
By rudy on 10/13/2010 1:07:35 PM , Rating: 1
Competition is fine the bigger problem is people like myself purposely purchase from out of state. Most of the time I will not buy a product which has tax. What it means is that people actually make our entire economy less efficient since we are purposely shipping things on average further than we need too. If taxes were forced on all purchases period you would prefer to purchase closer to home to help business and get your items to your house faster.


RE: i wonder
By mattclary on 10/13/10, Rating: -1
RE: i wonder
By Anoxanmore on 10/13/2010 4:00:37 PM , Rating: 2
$7.25/hr is $15,080 a year.

Unless you live in South Dakota, North Dakota, Montana, or parts of Nebraska. One cannot live on that.

Keep in mind that is before taxes... After taxes (avg 15%($2,262) depending upon your W2), you are down to $12,818.

That is a ludicrous wage even in the states I mentioned. I don't know how people surivived on 5.15$/hr. ($10,712 before taxes)


RE: i wonder
By FITCamaro on 10/13/2010 8:36:06 PM , Rating: 3
You're NOT supposed to live on minimum wage. You're supposed to work on that as a teenager. Or in college. Not taking care of yourself or, much less, a family.

This idea that minimum wage is something you should be making past 22 needs to end. It's called MINIMUM for a reason.


RE: i wonder
By YashBudini on 10/13/2010 11:08:48 PM , Rating: 3
quote:
You're supposed to...

But you use these words for all people as if it's always possible.

Guess again.


RE: i wonder
By The Raven on 10/15/2010 12:25:06 PM , Rating: 2
Although I agree with your objection, I disagree with your reasoning. It is not just for teens. People can live on min wage fine. Especially if you have a dual income. My wife and I did it for a year (not dipping into savings, but adding to it) and it was uncomfortable at first but we kind of got used to it. That's all relative I conceed, but what isn't relative is that you can't get by w/o a job.

And due to min wage laws, jobs are being eliminated because employers are expecting more out of their artificially priced employees.

And if an immigrant is coming here for sub-min wage, then I also think it speaks to the fact that you can live on min wage (granted that is a combined wage among all family members, including children, but it is still less than 15k in many cases). Just not in a big house with all the trimmings.

We have it REALLY good in this country and it is difficult for most people to imagine life w/o many of the luxuries that we consider necessities.

And if anyone dares to attack me for not being compasionate or some crap like that, then why aren't you in Africa helping people there live to see their 20th bday? That's right, because you really aren't as compassionate as you think you are. You just want to make people who believe in the free market look like a bunch of dbags so you can help prevent your standard of living from being reduced. Trust me. A free market is the greatest equalizer. And if you want to be compassionate you would support that (and keep in mind that private charity is a part of that).


RE: i wonder
By theapparition on 10/13/2010 1:13:11 PM , Rating: 2
The reason that hasn't happened is because a store without a physical presence doesn't have a state tax ID number, and without that, there is no mechanism to collect and pay that tax. It has always been the consumers responsibility to report that tax.

It never was a real issue before, because catalog sales were so minimal. But now, with internet e-commerce becoming a dominate force in sales, states feel that they are missing a signifigant source of revenue. Not to mention the local stores in your state (you know, the ones that employ citizens and pay taxes) can't compete against web based taxless ones, so there is an indirect loss of revenue and other costs due to unemployement, etc.

People can try and fight this as much as they want, but it's already law, and eventually states will start enforcing that tax.


RE: i wonder
By AlexWade on 10/14/2010 9:15:31 AM , Rating: 2
I have a better idea. BAN SALES TAXES! Problem solved. The only issue is governments which waste a lot of money, such as North Carolina, will cry the blues.

In North Carolina, the state raised the gas tax for a special account called the highway trust fund. Soon after, money was taken from the highway trust fund and made part of state's overall budget. Even after doing that, the state still had a budget shortfall. So several years later, the state started to push for an education lottery to help pay for schools. The lottery did succeed in passing, albeit illegally because the vote was taken when a chief opponent was unable to vote. The promise was that lottery money would add to the money the state gave to education. What happened was the lottery money replaced the money the state gave to education. And yet, the state still had a budget shortfall.

With such mismanagement, more money is never enough money. My home state is greedy and wasteful. The state's past administration and the current administration are being investigated for corruption. Some people have already served time in federal prison because of corruption. The corruption runs deep. If this state wasn't so corrupt and wasteful, it would not need any sales tax at all.


Wow.
By Denithor on 10/13/2010 11:13:58 AM , Rating: 1
For once I actually applaud the actions of the ACLU. Usually I just don't agree with them but this one is big. Keeping internet commerce tax free means keeping internet commerce viable.




RE: Wow.
By trajan on 10/13/2010 11:21:24 AM , Rating: 5
The ACLU isn't getting involved because it wants to stop internet taxation. It's involved because it wants to protect citizens' privacy against government intrusion. The ACLU has this crazy idea that maybe our government shouldn't get to know everything it wants to about our private lives.

But yes, preventing an extra few percent tax on our online purchases is much more important than civil liberties and our constitutional rights. I'm glad you can reluctantly bring yourself to agree with the ACLU for this reason.


RE: Wow.
By Spivonious on 10/13/2010 11:21:10 AM , Rating: 2
Please read the article. Internet commerce is not tax free; the consumer is supposed to report the purchase and pay the sales tax directly to the state (assuming the state has a sales tax). This suit concerns North Carolina's request to get sales data from Amazon customers in order to then go after the unpaid sales tax. If they just wanted a number and a name/address, then I think Amazon would do it, but they want specifics of the sale (book versus CD, etc.), which Amazon feels violates the privacy of their customers.


RE: Wow.
By FITCamaro on 10/13/2010 12:11:28 PM , Rating: 2
Exactly. You are supposed to pay the tax on anything bought online. Few people do. Don't complain if your state tries to collect that lost tax revenue. Now they shouldn't need anything more than who you are and what you paid for the item so they can determine the tax. But any other information they shouldn't need.


RE: Wow.
By Flahrydog on 10/13/2010 1:05:50 PM , Rating: 2
I assume they want to know the type of item to determine if it is actually subject to sales tax. In MA, you do not pay sales tax on clothes or food. Without this information, the state would not only be taxing people who bought food or clothes from Amazon (which they aren't allowed to do), but also everyone could claim that they bought food or clothes (even if they bought a book or cd).

That is not to say I am for Amazon giving out this information, because I am not. But that is my take on the states reason.


RE: Wow.
By theapparition on 10/13/2010 1:03:16 PM , Rating: 2
quote:
Please read the article. Internet commerce is not tax free; the consumer is supposed to report the purchase and pay the sales tax directly to the state (assuming the state has a sales tax).

Absolutely correct.

quote:
If they just wanted a number and a name/address, then I think Amazon would do it, but they want specifics of the sale (book versus CD, etc.), which Amazon feels violates the privacy of their customers.

Very close. As I understand it, Amazon has already turned over much of those detailed order history, but with no names. Now if they turn over the names and amounts, Amazon is concerned that the records could be linked, tying names to detailed transactions.

Sounds to me like Amazon screwed up, they should have never provided detailed order information. Only should have provided residents names and total amounts.


RE: Wow.
By YashBudini on 10/13/2010 11:05:41 PM , Rating: 2
quote:
Absolutely correct.

But so what?

The same people who don't pay the sales tax to their state will be the first to whine that there's a new sales tax when one on the Internet finally gets issued. And they will also be the first to complain about whatever services get cut because of dropping state sales tax. Some cheese with your whine?

My question - If a state wants to tax 'Net purchases by their residents why has the Fed stopped them? It's none of their friggin' business, both literally and figuratively.


Go ACLU!!!
By mgilbert on 10/13/2010 1:06:42 PM , Rating: 3
The ACLU is often misunderstood. They fight for the constitution and what it stands for, no matter what, and I agree with them. They've sided with religious individuals and/or groups countless times, but that never gets reported - I wonder why.

In any case, I live in Kentucky, and the state of Kentucky can kiss my a$$ when it comes to me reporting my online purchases. They get, and waste, enough of my money as it is. I'm actually a state employee, and all state employees are being required to take six days off without pay this year, just to balance their bloated, wasteful budget.

Go ACLU, Go!!!




RE: Go ACLU!!!
By FITCamaro on 10/13/2010 8:42:15 PM , Rating: 1
Please. The ACLU has helped sue teachers for wearing a cross around their neck in the classroom while also defending teachers for having blatantly political literature as well.

The ACLU is nothing but a hack organization that largely spits on the Constitution. Sure they get a few things right from time to time. But by and large, its a bunch of liberals.


RE: Go ACLU!!!
By corduroygt on 10/14/2010 11:43:21 AM , Rating: 2
Wearing a cross around the neck as a teacher is wrong and it should be sued, but I'd like to see where they defended the blatantly political agenda, which should also be forbidden in schools.


RE: Go ACLU!!!
By chrnochime on 10/14/2010 2:24:24 PM , Rating: 2
That's like saying wearing a turban at school is wrong and should be sued. A turban is part of both culture AND religion. Great thinking you got there *roll-eyes*


RE: Go ACLU!!!
By Lee Usa on 10/14/2010 12:38:28 PM , Rating: 2
You are wrong. The ACLU did not help sue a teacher for wearing a cross in the classroom.

If you have any PROOF that claims otherwise, please present it.


RE: Go ACLU!!!
By The Raven on 10/15/2010 12:39:22 PM , Rating: 2
I think that the problem with the ACLU is that "Idle hands are the Devil's playthings". This is the problem with any union. It's not that they are bad or greedy for forming. But that when there is no real injustice going on, they make it a big deal and claim it is some tragedy.

In this case I am rooting for them as I think it is retarded that we have sales taxes the way they are.


RE: Go ACLU!!!
By YashBudini on 10/13/2010 11:12:53 PM , Rating: 2
quote:
They've sided with religious individuals and/or groups countless times, but that never gets reported - I wonder why.

There's a simple answer for that, there's no controversy with agreement, hence there's no news.


RE: Go ACLU!!!
By AlfB on 10/14/2010 11:56:14 AM , Rating: 2
I have to disagree in some cases. Everytime there is some suit over separation of church and state, the ACLU jumps right on the bandwagon but if their express purpose is based on the constitution then they are not doing what they say. Now there will be those that will disagree but the constitution does not have anything in it about separation of church and state. It says that the state cannot create a state religion and that is due to the things going on in England with the creation of the church of England etc. What they were trying to prevent is the government creating a religion and forcing people to be part of it. That whole issue has grown out of proportion and become this whole thing of there cannot be any religion in government. No matter what anyone wants it to be now, that is what it was for. When the ACLU uses this to prevent stuff like prayer at a football game, they have started making their own interpretation of things and that is exactly what they say they are against.


interstate sales tax...
By chromal on 10/13/2010 5:14:37 PM , Rating: 2
I guess an expert on state federalism issues could explain this, I surely would like such an explanation. States are able to govern within their own borders, but generally may not govern outside their geopolitical boundaries...

Question 1: What right have state governments to charge a tax on a sale occurring in another state?

Question 2: Doesn't the federal government have sole jurisdiction over issues involving interstate commerce? Couldn't the only legal interstate sales tax be a federal sales tax?




This is it right here:
By Motoman on 10/14/2010 6:23:32 PM , Rating: 2
quote:
...seeking to recover what it claims to be $50 million in sales taxes that were not paid by citizens on purchases dating back to 2003.


Amazon isn't the one not paying these taxes. The citizens of NC are the ones not paying taxes.

The fix is not to sue the vendor for not having done something they shouldn't be doing. The fix is the get your citizens to comply with existing laws.




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