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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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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.


"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer














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