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Cash strapped N.C. looks to milk money out of citizens in its battered local economy

When it comes to internet purchases, you're supposed to individually list them on your yearly tax return and then pay back sales taxes to the state.  Of course, few people do this.  Now the government of North Carolina and other states are battling Amazon.com and other e-tailers to get these records.

Amazon.com this week filed suit against the North Carolina state government -- specifically, the Department of Revenue (DOR) -- claiming that the state's demand for records of virtually every North Carolina resident who has purchased anything from Amazon since 2003 was not only unreasonable, but a violation of privacy.

Amazon writes in a filing for the case, "In re: Amazon.com LLC vs Kenneth R. Lay", Case No. 10-00664, U.S. District Court, Western District of Washington, "[T]he DOR has no business seeking to uncover the identity of Amazon's customers who purchased expressive content, which makes up the majority of the nearly 50 million products sold to North Carolina residents during the audit period."

If the case is lost, Amazon may have to turn over the records of millions of its customers in North Carolina.  Those individuals who purchased from Amazon (but did not report their purchase on their tax returns) might be audited and face civil penalties. At the very least, they would likely be expected to repay back taxes on the items they failed to report to the government.

In North Carolina, failing to pay state sales taxes is handled as a civil infraction.  Under the codes 105 236(5)c. and 105 236(5)a., citizens can face additional fines for dodging state taxes.  The penalty would likely be to pay 25 percent more tax, except on small items, which would require taxpayers to pay only an additional 10 percent fine.

The fight is the latest in the growing trend of states hungering for internet tax revenue.  Many states have passed or are debating laws that would tax digital downloads such as those offered by Amazon, Steam, Apple's iTunes store, or others.  While many in the public have complained about excessive taxation on the federal level, it is actually the states that have been pushing the most for bigger taxes of late.  The federal government has made some mild efforts to fight taxation of the internet.



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And the purpose?
By Ristogod on 4/20/2010 11:53:16 AM , Rating: 4
I just don't understand the constant need for the government to steel from it's citizens, which they will do nothing but waste it on useless unneeded government spending and abuse.




RE: And the purpose?
By MrBlastman on 4/20/2010 11:56:47 AM , Rating: 5
It is simple, really. NC gets pretty warm in the spring/summer/fall. In the NC assembly, the politicians produce quite a bit of hot air. In order to combat this, they have to constantly turn up the AC to cool things off.

As a result, you're stuck paying for it. If you protest it, they will create more hot air and you'll pay even more taxes.


RE: And the purpose?
By Mitch101 on 4/20/2010 1:38:55 PM , Rating: 3
The fact that the guy is trying to do this retroactively on to the state instead of going forward screams assh0le. Especially at the apex of the economic downturn. Thankyou sir may I have another?


RE: And the purpose?
By jpr703 on 4/20/2010 11:59:03 AM , Rating: 5
Taxing and fining your citizens must be a great way to improve your local economy! I wonder who I can sue to get the money to pay the fines if they win.


RE: And the purpose?
By mikecel79 on 4/20/2010 12:03:07 PM , Rating: 5
Let me first say I am totally against this. If Amazon loses this case then every state will start asking for the same information from not only Amazon but all the major e-tailers out there.

The government is not really stealing anything from it's citizens. It is trying to collect taxes that according to the law you are required to claim taxes on. I think this is the wrong way to go about doing it but it's certainly not stealing from it's citizens.

If NC does win this case I expect no one in an elected position will be re-elected....


RE: And the purpose?
By Kurz on 4/20/10, Rating: -1
RE: And the purpose?
By chenjf on 4/20/2010 3:00:06 PM , Rating: 2
Thats because they have what is called VAT (Value Added Tax). But if you really want to go down the path of if other countries dont have it, why should we. Then you can do that with a lot of the freedoms we have now.


RE: And the purpose?
By walk2k on 4/20/2010 3:59:47 PM , Rating: 3
This "country" doesn't charge sales taxes either. But states do.


RE: And the purpose?
By Targon on 4/20/2010 2:26:08 PM , Rating: 4
The idea of a sales tax itself is that government services are needed to support the businesses, such as road maintenance and police coverage, plus hospitals, clean-up, etc. Now, if you travel out of state to purchase something, why should the state you live in have the right to charge you ANYTHING on that sale?

This is really what has driven out of state sales for far longer than the Internet has been in existence, the fact that states could not charge out of state businesses for sales tax. So, then the Internet comes along, which the government has not supported, and now a number of states are trying to claim that online sales are now subject to sales tax.

The real solution to states having a budget problem SHOULD be to cut down on expenses. Stop spending $1,000,000 on projects that would cost a private citizen $100,000! Don't make all those government holidays as paid time off, and stop giving overtime pay to people who SHOULD not get overtime due to being paid so much that they really shouldn't get paid extra for doing their jobs!

I've had many jobs where due to my level of responsibility, I was just a salaried employee, and didn't get overtime, no matter how much extra I might work. If government would adopt that approach, how much money would be saved? Anyone who gets more than $65,000 per year should probably no longer get paid overtime, since their level of responsibility SHOULD be that the job gets done, no matter if it takes 4 hours, or 15 hours.


RE: And the purpose?
By callmeroy on 4/20/2010 2:57:14 PM , Rating: 5
Welcome to IT.....

Where from helpdesk to network engineer, to IT manager, you are expected to be on call 24/7/365 and oh yeah you are paid salary so no OT.

Been in the biz for 14 years .... I've had easy 40 hour weeks, but I've also worked 18 hour days...it comes with the job....(not that I don't still reserve the right to bitch and moan here and there about it...lol)


RE: And the purpose?
By Alexstarfire on 4/20/2010 6:13:05 PM , Rating: 5
No kidding. Just last year they did some road work on a road near my house. They were taking out these tiny bridges (about 30 feet long) and putting in land to pave on. How long did it take them per bridge? 3 months. How long should it have taken? Less than two weeks. Seriously, not hard to destroy a bridge, lay a pipe for the water to go through, dump some dirt on it, and then pave the road and sidewalk.


RE: And the purpose?
By JediJeb on 4/21/2010 10:51:15 AM , Rating: 2
As one county road worker once told me " We just bought a new 4 door truck that sleeps 6" and if they could find a way to put 8 people in it and sleep I imagine they would.


RE: And the purpose?
By FITCamaro on 4/20/2010 10:39:21 PM , Rating: 2
I agree. While I'm not going to claim to be perfect here, states have every right to try to collect sales tax that you're supposed to pay.

And in reality we should be paying far more in taxes to state governments and far less to the federal government.


RE: And the purpose?
By Jaybus on 4/21/2010 11:52:50 AM , Rating: 2
Well now that is the question isn't it? Are we supposed to pay it? It depends on whether or not the business has a "nexus" in your state. A nexus is a "direct or indirect physical presence". A direct presence is owning or leasing property in the state, such as distribution center, warehouse, etc., or in general having employees who work in that state. An indirect presence is having employees or contractors that enter the state, as for example sales reps, non-manufacturer warranty service calls, etc.

In 1992 the US Supreme Court ruled in the Quill Corp. v. North Dakota case that simply shipping catalog orders to another state did not constitute a nexus. In other words, UPS and FedEx are not acting as agents of the company.

So, that is the question. Does Amazon have nexus in NC? Before 2009 they did not. In 2009 NC adopted the "Amazon rule", which means that if any website owned or paid for by a NC business links to Amazon, then the state of North Carolina considers that enough to claim Amazon has nexus in North Carolina.

New York and Rhode Island also have Amazon rules, so in spite of the 1992 Supreme Court decision, there will have to be another long trek to the Supreme Court over the issue of whether or not a website link constitutes a nexus. Since that would be very expensive and drawn out, Amazon is first challenging the privacy issue.

As for paying more to state and local governments and less to the federal government, I couldn't agree more. But the states are asking us to pay more AND the federal government is now asking us to pay more too. It would be better for taxpayers if the state got more of your tax dollars than the fed. It is easier for citizens of a state to keep their state in check than it is to keep the feds in check. Alas, that level of state sovereignty was lost when the South lost the Civil War.


RE: And the purpose?
By invidious on 4/20/10, Rating: -1
RE: And the purpose?
By BladeVenom on 4/20/2010 12:53:56 PM , Rating: 5
The money would fund even more jobs if it stayed in the private sector. The government spends your money to buy votes.


RE: And the purpose?
By kerpwnt on 4/20/2010 1:50:45 PM , Rating: 5
They spend a lot of that money in the private sector.


RE: And the purpose?
By gamerk2 on 4/20/2010 1:56:30 PM , Rating: 5
Hell, they subsidise entire industries (Farming anyome?) to keep them economically viable. Hell, farming subsidies may cost several hundred billion, but they do increase the supply of food, driving down prices for everyone else. Of course, since we dont "see" where the money is going, we yell about how much we pay (which is still less then any other western nation).

Of course, our two biggest expenses are Medicare/Medicade and Military Spending, and one party in particular has made it clear that we can never under any circumstances cut funding for those two entities, so where exactly does that leave us?

I also note: The Feds are running a deficit, as are the states, as are the people who elect to those positions, ordinary americans. Maybe people should start looking in the mirror before asking why government doesn't work right...government in a democracy mirrors its people, after all.


RE: And the purpose?
By mandrews on 4/20/2010 2:14:17 PM , Rating: 5
quote:

Hell, they subsidise entire industries (Farming anyome?) to keep them economically viable. Hell, farming subsidies may cost several hundred billion, but they do increase the supply of food, driving down prices for everyone else. Of course, since we dont "see" where the money is going, we yell about how much we pay (which is still less then any other western nation).


Why should we subsidize industries? That model was tried and failed in communist Russia.

What's the point of claiming to have a free market, if you've essentially nationalized large portions of it behind the scenes?

quote:
Of course, our two biggest expenses are Medicare/Medicade and Military Spending, and one party in particular has made it clear that we can never under any circumstances cut funding for those two entities, so where exactly does that leave us?


Both parties share some guilt here. The Democrats typically try to burden the taxpayer with the cost of paying for programs like welfare that take from those working taxpayers and give to those who generally are too lazy to educate themselves and get a job.

The Republicans, meanwhile wisely recognize that defense spending is essential, but they often go overboard committing to costly military campaigns outside the U.S.

There are some voices of reason within both parties, but often the loudest voices calling for reform are equally corrupt. Look at Sarah Palin who is advocating "fiscal responsibility" and rallying the Tea Party, when she as governor endorsed millions in pork barrel initiatives.

The sad fact is both parties are badly broken at this point, and that there's little point to voting for third parties. The best we can hope for is try to educate ourselves on the track record of our local politicians and support candidates who actually practice fiscal responsibility and oppose those who do not, regardless of the party.


RE: And the purpose?
By nafhan on 4/20/2010 2:30:43 PM , Rating: 2
Don't forget about the large percentage of your taxes that go towards repaying interest on the national defecit. I think it was something like 5% of the federal budget last year.


RE: And the purpose?
By soloman02 on 4/20/2010 3:55:35 PM , Rating: 3
quote:
Maybe people should start looking in the mirror before asking why government doesn't work right...government in a democracy mirrors its people, after all.


This is a constitutional republic not a democracy. Though one could argue we are no longer a republic as the representatives in congress don't consult or care about the constitution anymore. http://www.youtube.com/watch?v=k2iiirr5KI8


RE: And the purpose?
By ClownPuncher on 4/20/2010 6:07:50 PM , Rating: 2
A constitutional republic with a representative democracy. Always has been.


RE: And the purpose?
By JediJeb on 4/21/2010 10:59:55 AM , Rating: 2
I come from a farming family and I can tell you that the subsidies really don't make it down to the farmers. Maybe some of the buyers make out good on them I don't know. The only "subsidies" most farmers get are low interest loans which have to be paid back even if a crop fails. And usually you are required to carry crop insurance if you take the loans which then eats into any profit a farmer may make. If it cost a farmer $3 per bushel to grow corn, and at the end of the year the price of corn is $2 per bushel, then the farmer just has to take a loss. It is one of the few industries where the producer of the good has no say in what the selling price will be.


RE: And the purpose?
By MojoMan on 4/20/2010 12:57:16 PM , Rating: 3
Sir, have you ever heard of the Federal Reserve? You know, the private banking cartel that controls our economy, and uses you and I, the tax payer, to fund its counterfeiting operation?

You don't think the government steels from the citizens. They do sir, quite literally. I don't think people would be upset if we weren't paying about 50% of everything we make back to the government. Do you work for the government? I do, so I understand where your jobs comments come from. Just because a government job exists though, that does not mean it is necessary. The entire IRS is a questionable (il)legal entity for example. :-)

Remember the government bailouts to failing companies, like AIG? Yes, we have a right to think those billions disappear. Maybe not into thin air, but certainly into places that money does NOT belong.

Now, in NC's defense... Hmmm..... Can't think of a defense since they probably have out-dated tax codes, and simply don't want to put in the effort to correct those tax codes to streamline their revenue. I could be wrong. Somebody feel free to post a link on this point. I'd be interested and open to ideas on this. I doubt there will be much debate her though since the middle class is constantly taxed like crazy while large corporations like Exxon Mobile pay nearly nothing.


RE: And the purpose?
By MrBlastman on 4/20/2010 12:57:09 PM , Rating: 3
Millions of jobs? Say what?

Last time I checked I saw the government piss trillions of dollars down the drain on economic stimulus and hardly any jobs have resulted from it as of yet. Instead, they then spent their time creating a new program that will cost us _even more_ money and--jobs in the private sector.

Our whole government is a waste. Everything _but_ the Bill of Rights and the Constitution. I propose we keep those and fire all the people in Washington.


RE: And the purpose?
By Ammohunt on 4/20/2010 1:41:20 PM , Rating: 2
Q:Tell me einstein where is hte revenue from all these government jobs?
A: their isn't any Government jobs produce nothing! and contribute very little to the economy.


RE: And the purpose?
By kerpwnt on 4/20/2010 2:23:22 PM , Rating: 3
There may be no direct revenue, but government programs can contribute to long term production. Education creates more skilled workers and inventors. Space programs and military intelligence pour money into the American private sector to create new technologies. The DOT creates roads that benefit private industry and often employs private contractors to build and maintain these roads.

Sure there is waste, but to say they contribute very little is a stretch. Even if the money goes to a government job that doesn't appear to produce anything, like soldiers & security workers, at least that money lands in American laborer's pockets and not straight in the Chinese manufacturing industry.


RE: And the purpose?
By Targon on 4/20/2010 2:33:35 PM , Rating: 3
You are talking about the idea of government INVESTING in programs with the idea that there will be some sort of return on that investment, even if it takes a long time. That is something I agree with, but you have to look at the situations where government wastes money, not in investments, but on really stupid garbage.

Now, one big waste is how much money is paid, not to elected officials, but to support staff for elected officials. How much do these people make, and why is it so much more than the same position would pay in the private sector? Why does the government knowingly pay 10 times the going rate for contracted services when the people doing the work could get paid the same if they would be hired by the government directly? Why is it that we don't see government looking at COSTS as the reason for budget problems, rather than on just looking at increasing tax revenue dollars as the solution?


RE: And the purpose?
By sinful on 4/20/2010 8:27:47 PM , Rating: 2
quote:
Why does the government knowingly pay 10 times the going rate for contracted services when the people doing the work could get paid the same if they would be hired by the government directly? Why is it that we don't see government looking at COSTS as the reason for budget problems, rather than on just looking at increasing tax revenue dollars as the solution?


ZOMG you've suggested SOCIALISM as a way to reduce costs!

The Republican party DEMANDS that the government create inefficiency by hiring contractors to do those jobs. Anything else is socialism!!

Keep the government out of the private sector by making them use wasteful contractors, then complain about wasteful spending!


RE: And the purpose?
By Kurz on 4/21/2010 9:43:28 AM , Rating: 2
Well it all stems back that the government has a credit card. Its the Currency of the people, and Taxation, and Loans it takes.

Meh if we had a fixed rate Currency we would have stable growth and prosperity instead of these constant up and down business cycles.


RE: And the purpose?
By Newspapercrane on 4/21/2010 10:19:41 AM , Rating: 2
How exactly would one go about creating a "Fixed Rate Currency"?


RE: And the purpose?
By Ammohunt on 4/29/2010 3:36:45 PM , Rating: 2
He is talking about the gold standard which if you analyze the the valid reasons it was abandonded is not a good idea to go back to it.


RE: And the purpose?
By mandrews on 4/20/2010 2:06:04 PM , Rating: 3
quote:
So you think the money the government spends dissapear into the air? The billions of dollars in the annual budget that you might consider "waste" are in actuality funding millions of jobs.


The state and federal governments were never designed to fund "millions of jobs". Rather, they should provide on a state level for maintenance of the road system, education, and law enforcement and on a national level for defense of the nation. Beyond that most of the spending is a waste of taxpayer money.

Soft-headed liberals will try to have you believe that we need to waste billions spending on public healthcare and welfare. People should get jobs, educate themselves, and pay for their own retirements, not leach off the harder working members of society.

If government was reduced to the bare essentials, measures like sales taxes would like be unnecessary.


RE: And the purpose?
By Reclaimer77 on 4/20/2010 6:47:50 PM , Rating: 2
quote:
If government was reduced to the bare essentials, measures like sales taxes would like be unnecessary.


Hell this country used to run just fine without a Federal Income Tax at all. And they claimed even that would just be a "temporary" measure.

I doesn't cost trillions of dollars to govern a country people... it really doesn't.


RE: And the purpose?
By jkp on 4/20/2010 1:21:12 PM , Rating: 3
The floggings will continue until the morale improves!


RE: And the purpose?
By dxf2891 on 4/20/2010 2:38:12 PM , Rating: 3
It would be my hope that the state government would utilize this revenue stream for education, thereby allowing for better reading comprehension. The citizens would then be able to steel themselves against the accusations that the government would steal from them.


RE: And the purpose?
By Reclaimer77 on 4/20/2010 4:23:54 PM , Rating: 2
I live a few miles from Charlotte and I'm very informed on what the Charlotte politicians are up to. And to answer your question : Charlotte is ran, and has been run, by Democrats. 'Nuff said. When the economy was good they bloated up the budget full of pet projects and art'sy farty'sy urban development bullshit. When the recession hit, there wasn't enough money to pay for all their liberal shit they filled the budget with. And god forbid they actually have to CUT some art and social programs...


RE: And the purpose?
By walk2k on 4/20/2010 4:30:28 PM , Rating: 2
Yeah they shouldn't "steel" from citizens they should copper or zinc from them intead.

Or maybe nickel (and dime)... =)

But seriously UMMMM it's called taxes... you realize that's how governments pay for the things their citizens demand from them, like roads and schools and police, right?


RE: And the purpose?
By Reclaimer77 on 4/20/2010 4:38:43 PM , Rating: 2
quote:
But seriously UMMMM it's called taxes... you realize that's how governments pay for the things their citizens demand from them, like roads and schools and police, right?


THE City of Charlotte last year bought four rocks, at two hundred THOUSAND DOLLARS each. While at the same time claiming they can't afford to pay teachers and build roads.

So STFU walk, you have no idea how bad the situation is. You must be in fantasy land if you think tax money is always going to things that it actually should be.


RE: And the purpose?
By Camikazi on 4/20/2010 9:43:07 PM , Rating: 2
Hope those rocks were made of gold or silver or something.


RE: And the purpose?
By thurston on 4/20/2010 10:57:22 PM , Rating: 1
Why would the city of Charlotte pay teachers? I would think they would be paid for by the county.


RE: And the purpose?
By Director on 4/21/2010 7:51:24 AM , Rating: 2
It's what happens when a government borrows money from private banks who invent it out of thin air and then charge interest. Google "The Money Masters", "The Secret of Oz" or "money as debt" and you'll soon understand what's going on.


RE: And the purpose?
By Mike Acker on 4/21/2010 8:29:11 AM , Rating: 2
you have to understand: government is self-serving

too many people who are in government are there because they like being in a position of power. to maintain that they need to maintain voter support -- and entitlements is one way they do this.

they will close the fire dept. , lay off the policemen , and let the roads go to pot before they reduce any entitlement

it is a symp[tom of a corrupt society. all corrupt societies fail because they steal from themselves the substance of their own sustainment.


"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein














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