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 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
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
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
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
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
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.

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