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  (Source: glassdoor.com)
North Carolina Department of Revenue has agreed to discontinue requesting the personal information of its residents that shop through Amazon

A privacy lawsuit between the North Carolina Department of Revenue and the American Civil Liberties Union (ACLU) was settled on Wednesday, and the state agreed to stop requesting its residents' personal information through Amazon.com 

Since 2003, the state has asked Amazon for detailed records of what North Carolina customers were purchasing on the site in order to collect sales use taxes, which amounted to about $50 million. Amazon gave this information to the state without including the customers' personal information such as their name and address, but the North Carolina Department of Revenue started to demand this information as well, which led to the legal battle. 

The American Civil Liberties Union joined Amazon in their fight to protect customer information when the online retailer refused to violate the privacy of its customers. 

"The N.C. Department of Revenue does not need access to private customer records that reveal which specific customers in North Carolina have ordered which specific books, music or movies in order to complete its audit of Amazon and collect any taxes owed," said Jennifer Rudinger, executive director of the American Civil Liberties Union of North Carolina. "We are pleased that the public's First Amendment rights have been upheld by this settlement, which prohibits the department from seeking this kind of information from Amazon or other Internet retailers in the future."

A representative for the North Carolina Department of Revenue argued that the state was never really interested in its citizens' buying patterns.  

"The case between the North Carolina Department of Revenue and Amazon has long been twisted into something it is not," said Beth Stevenson, spokeswoman for the North Carolina Department of Revenue. "Bottom line, this is about fairly collecting the tax that is due to the state of North Carolina and nothing more. The Department has always maintained that we do not need - or want - titles or similar details about products purchased by Amazon customers. The department voluntarily destroyed the detailed information that Amazon unnecessarily provided and offered them the opportunity to comply with the state tax laws moving forward.

"The lawsuit on this particular issue could have been avoided altogether if not for the aggressive stance Amazon took to avoid compliance with North Carolina's tax laws. There would have never been an issue of customer privacy if Amazon would simply collect the North Carolina sales tax that others already do."

U.S. District Judge Marsha Pechman ruled last October that the North Carolina Department of Revenue had overstepped its boundaries with its request for personal information, and noted that there is "no legitimate need" for them to have such information. 

"The fear of government tracking and censoring one's reading, listening and viewing choices chills the exercise of First Amendment rights," said Pechman. 

According to Rudinger, Amazon was not part of the settlement, and it was unclear whether Amazon's lawsuit regarding the state's audit was pending on appeal.

In addition to Amazon, the North Carolina Department of Revenue is also facing lawsuits from many online travel companies such as Travelocity.com, Travelscape, Hotels.com, Trip Network Inc. and Orbitz due to the state and counties' tendencies to "arbitrarily change the contracts" they have with hotels in North Carolina. 



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Don't get the wrong idea
By tmouse on 2/10/2011 8:22:43 AM , Rating: 4
The article as written, could give some of the readers the wrong idea. NC can and probably will request the names and amounts of purchases (probably as an end of year statement from Amazon) for tax purposes. The ONLY restriction is they cannot ask or be given the titles or anything that can lead to the identification of the materials being purchased. I really doubt NC was ever interested in that information but Amazon choose to send the item numbers and amounts. This really was just a show lawsuit filed by the ACLU for their own promotion, that’s why NC settled it so quickly. I cannot see why the NC tax department would ever want or care about the nature of the materials bought just the total sales figure for the year. Possibly Amazon chose to send the additional information to trick the courts into an overly broad interpretation that could let them off the hook for additional reporting. While I'm against use taxes (I live in a state with them) I also do not want to pay additional property taxes, so I can live with them. In a state with a lot of renter’s, payroll and use taxes spread the load better than just property taxes and are somewhat fairer than the assumption that home owners are richer than everyone else. In todays computerized world such a list is trivial and Amazon is one of the leaders in computerized goods processing. I certainly do not think they should have to collect the taxes themselves nor do I think any courts would ever enforce such a ruling as it would interfere with federal rights and states autonomy. This way the state with the tax has the burden of collecting as it should be and the reporting by the retailer is really trivial. I do not think Amazon will win in a suit to exempt them from reporting total sales per person figures to the state.




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