Amazon Wins Small Battle in Case Against NC Tax Collectors

All around the country different states have tried to find ways to collect sales tax on purchases that state residents make online. More than one state has tried to capture sales tax from Amazon over the years and the latest to step up and try is North Carolina.

Amazon has been trying to block NC from forcing it to give up detailed customer data that the state could use to link buyers to specific products purchased. Amazon and the ACLU took the case to court and Amazon has won a small victory with the judge presiding over the case ruling that NC has “no legitimate need” for details about what books, music, and movies the customer purchased at the site according to CNET News.

The judge presiding over the case is U.S. District Judge Marsha Pechman from Washington State. She wrote, “In spite of this [lack of need], (North Carolina) refuses to give up the detailed information about Amazon’s customers’ purchases, while at the same time requesting the identities of the customers and, arguably, detailed records of their purchases, including the expressive content.” 

CNET News reports that the information that Amazon has already turned over includes details of what items were shipped to specific zip codes within the state. The legal battle began when NC asked for specific names and addresses for each purchase and threatened to sue if it didn’t get the information. Amazon has no physical presence in NC, but the state has a use tax of 5.75% that is applied to anything purchased or received via the mail.

The ruling isn’t a clear victory for Amazon. Pechman noted that there is nothing preventing NC from deleting the data it has on file and making a more specific request for information. She stated, “Issuing the declaratory relief as phrased does not prohibit (N.C. tax collectors) from issuing a new request for information as to only the names and addresses of Amazon’s customers and general product information, assuming that (the state) destroys any detailed information that it currently possesses.”

The ACLU joined Amazon in the fight to keep purchase data private for NC buyers earlier this month.  The saga between Amazon and NC started back in April 2010. NC residents that didn’t pay the use tax could be hit with a 25% fine for not paying the state tax on their purchases.