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Amazon Fights For Privacy of Customer Records
suraj.sun notes a CNET article on Amazon's lawsuit against North Carolina on the grounds that the state is trying to violate the privacy and First Amendment rights of Amazon's customers. "Amazon.com filed a lawsuit on Monday to fend off a sweeping demand from North Carolina's tax collectors: [for] detailed records including names and addresses of customers and information about exactly what they had purchased. ... North Carolina's Department of Revenue had ordered the online retailer to provide full details on nearly 50 million purchases made by state residents between 2003 and 2010. Because Amazon has no offices or warehouses in North Carolina, it's not required to collect the [state's] 5.75 percent sales tax on shipments, although tax collectors have reminded residents that what's known as a use tax applies on anything 'purchased or received' through the mail." Amazon is arguing that the records of what books, music, and videos its customers bought deserve enhanced protection.
Amazon should move to Switzerland!
Sales tax!? Bah, if you give up schools and paved roads, you can do without it entirely.
We do!
NC needs to pay Amazon for the data for "marketing" purposes. I'm sure Amazon would be happy to share.
Interstate trade regulation is one of the few enumerated responsibilities that the American government has. Its role is to step in to solve precisely this type of dispute. This would be a grand opportunity to decide once and for all whether internet purchases can be practically taxed, or whether the whole of interstate commerce law is a sham.
North Carolina shouldn't be demanding this type of information from Amazon, but the citizens of NC shouldn't be skirting the law and avoiding paying taxes either.
Where's the equality in this? Why not ALL the other companies that ship to North Carolina? Are they trying to set precedent by going after Amazon? If yes; pretty stupid, should have picked on a weaker prey.
That tax sounds retarded by the way, and that's coming from someone who lives in Holland,
-Your Dutch friend.
I think that's my first first-post in 13 years of Slashdot!
*wipes away tear*
(And to you damn kids with mod points who want to mark this off-topic, give an old man a break... Some day you'll be old, too!)
(Oh, and get off my lawn.)
Not that this is an excuse, but because the NC government won't play triage with projects and cut what it can tolerate so the budget is experiencing a shortfall again in the billions.
I've been boycotting Amazon for their one click patent, but this is a pretty good stance on their part. Unfortunately, the very fact that states would do this means I'd probably not want to buy from Amazon anyways, albeit for different reasons than their stupid patent stance.
I would think that this is North Carolina's way to have amazon.com to start collecting taxes when items are shipped to their state. It's a force move.
Logically, there would be way to much spent then collected IMO. The state would have to track down each customers tax returns for (they can only go back a certain amount of time for an audit and I though it was 5 years, not 7 which NC wants), and then correlate the data to either ensure that the taxpayer claimed the items or did not claim the items. Then the state would have to calculate taxes on said items, or see if it affects the effective tax rate for said taxpayer, then tack on interest to those monies, then notify the taxpayer if the state can find the tax payer (moved since filing, died, etc...).
Another question would be how the state came up with the number of purchases from amazon.com to their state?
There are no loopholes. It's either legal or it's not.
...but I can't imagine why in hell the revenue department should know what particular items were purchased by each customer. If they're worried about losing revenue then their focus should be limited to the monies paid only; gathering data on which specific xbox games that Cleetus T. Carolina purchased during the tax year seems irrelevant.
Should be "Amazon fights against tax legislation".
I'll be the first to stand for privacy, but it's not the real issue here.
Amazon is just trying to evades North Carolina taxes for them and their clients.
Perhaps North Carolina and Amazon could come to a compromise and instead of getting the details of exactly what a customer purchased they could instead get a broad category.
So for example -
Bob Smith
123 Fake Street
5x Books
Total Cost $50
But I don't know how a usage tax works so you might get a tax break if it was for example a school book instead of a "fun" book (e.g. Women's Porn/"Romance").
Look, taxes are collected on these companies in EU. Here, we leave companies in limbo and then have the brick/morters at an unfair disadvantage. It is also hurting gov. entities and making it difficult to balance budgets. It is far better to change the US law and require that online taxex be collected by all businesses. BUT, it should be a FIXED amount, which includes a FIXED fed, state, county and city rate. To be honest, I think that at this time, a singular fixed tax should be applied on all transactions across the net, the business collects it, and then sends to a singlar location per country. WIll it be confusing? Sure. That is why businesses will prop up that will handle that for small players, and just tack on their own amount.
And for the argument that this will hurt the 'development' of the net, give me a break. The net is VERY developed compared to what we had in the 80's.
I prefer the "u" in honour as it seems to be missing these days.
I sincerely hope Amazon wins, but it seems to me that without some kind of federal-level intervention, more and more states are going to push to get online / mailorder merchants to collect their taxes.
Amazon's big enough that if push came to shove, they could probably implement a sales tax system based on delivery address that could cover all 50 states and the territories.
However, what really scares me is that this would be a death blow to a lot of smaller online and mail order retailers. I built a catalog and shopping cart system for a friend who had a business model that just didn't quite fit existing off the shelf models, and I have to say that I do not relish the idea of having to build in a system for 50+ different sets of taxes. However, that task is childs-play compared to the accounting nightmare my friend would have in having to fill out forms and remittances to all those different jurisdictions. She gets by, but doesn't exactly have a huge margin... the extra complication of collecting for all those jurisdictions and time/effort needed to deal with it could tip the scales on whether her business continues to be profitable or not.
So, this isn't really about one state being greedy - it's about the camel's nose under the tent.
Sooner or later, someone will suggest that the federal government charge some modest tax (say 5%) on all online / mailorder sales, then distribute the funds to the states based on their share of the delivered sales.
Of course, the federal government would probably not be able to resist getting THEIR hands on the money and we'd either end up with an insane rate with the federal government back-dooring a national sales tax in, or the states complaining that the rate needs to be higher since they're still "losing money" versus collecting their full state sales tax.
This is just an ugly situation all 'round.
Personally, I would think that the success of online retailers is at least partly due to the largely tax-free nature of sales transactions. I doubt we'd see sales taxes kill e-commerce, but I can see it hurting small e-tailers and having a bit of a downward pressure on sales as it'll be eating into the spending power of the buyers.
The Digital Sorceress
You think judges don't know where the money for their yachts and golf carts comes from? You might as well ask for the gavels out of their hands, and their mistresses' and rent boys' phone numbers, while you're at it.
If you were blocking sigs, you wouldn't have to read this.
They're just using this as a legal reason not to release their customer records. If you could cite a constitutional amendment to get out of a tax audit wouldn't you?
Windows is a bonfire, Linux is the sun. Linux only looks smaller if you lack perspective.
We're talking about the most expensive government in the entire history of centralized power. To claim that lack of revenue is a problem is utterly laughable. With the trillions of dollars spent by the US government every year, we should be living in a utopia by now. But we're not. We're far from it.
Clearly, the problem is where the money goes, not lack of it. In fact, it could be argued that too much money is the problem. We ought to support any measure which keeps money out of the hands of the power elite, because common sense tells us that at the very least, they have way, way too much of it.
Read that headline as "Amazon Fights for Piracy of Customer Records"
This isn't the article you're looking for. Move along, move along.
Not that this is an excuse, but because the NC government won't play triage with projects and cut what it can tolerate so the budget is experiencing a shortfall again in the billions.
It's not a NC thing - ALL governments have that problem.
The only time they can cut is if the special interest group doesn't have enough political clout - See. GA and the grants for artists. - it'll probably get cut. GA is a solid Red state and in these economic times, many folks aren't too sympathetic with the artists who are getting government "handouts" to do what they are passionate about.
RIP America
July 4, 1776 - September 11, 2001
Amazon is arguing that the records of what books, music, and videos its customers bought deserve enhanced protection.
Aren't companies obliged to purge these records after some time, just like say, google, is obliged to purge search records?
I sure hope they are...
If Pandora's box is destined to be opened, *I* want to be the one to open it.
and many have specific taxes aimed at roads.
Wait till the majority finds out how plush federal, state, local, and school, retirements are and how much of a debt bomb we have coming up funding programs that would cause so much angst if there were in the private areas, especially those bailed out.
I know you might have tried to be witty, but when push comes to shove you can guarantee that three areas will be cut to make the pain unbearable
1. Schools
2. Police
3. Fire
Politicians know what buttons to push. Look at NJ for what uncontrolled spending does to a state and the actions needed to fix it.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Maybe NC ought to patent ''One Click Taxation'' and charge the other 49 states to use it - that would be a nice little earner for them and might solve their budget balancing problems.
In 1987, the Washington City Paper, a paper from the left, published the video rental history of Supreme Court nominee Robert Bork, from the right. There was next to no dirt found, but it wasn't for lack of self-admitted trying. It was a politically motivated stunt, and they were desperate to find X-rated rentals or even just a penchant for a particular actress of the day.
By revealing detailed media purchases to a government, it gives the incumbents the opportunity to smear political challengers.
The primary problem with sales tax (or VAT here in the EU) is that it is unfair. Sales tax is a regressive tax; in other words, one that hurts those at the bottom of the pile because the poor spend a higher proportion of their income on 'stuff'. As a result, you get an inverse Robin Hood tax (a Dennis Moore tax?) that steals from the poor to give to the rich. Income tax is a much fairer way to redistribute wealth.
Is not keep sales records for anyone - anywhere - for any longer that is required to process the transaction and handle disputes (60-90 days). After that, then they can aggregate the sales data and strip the identify of the user. Keeping records going back to 2003 (and earlier) is just stupid and bait for any state to try this (especially if NC wins this in court).
What's really interesting to me is that some states try to argue for use taxes on non-concrete goods, like ebooks or downloads or whatever - even though the ones whose laws I've read confine it to 'tangible' goods.
(especially if NC wins this in court).
...which they won't because it will have to be thrown out of state court (Amazon doesn't actually have offices in NC). It will have to be taken to federal court:
Amazon is incorporated (which I assume means that it should be treated as a person under the Constitution). This means that it should simply be able to say "no" to any request from a state outside its own (office locations in other states) per Article 1, section 10 and article 3, section 2. There is probably some legal precedent involved that makes it so these don't apply here but it certainly seems to me that the above mentioned MA, NH case should also have been easily demolished.
What am I missing here?
States need to recognize that they have lost the battle with online retailers and instead do what they can to lower the cost of business for in-state retailers.
Namely, get rid of sales taxes and make it up via property tax and income tax.
As luck would have it, the Federal tax code encourages this. An individual is allowed to deduct their choice of two out of these three forms of taxation via Schedule A. Residents of the states which only have two of the three taxes get an unfair advantage as they are allowed to deduct their entire state taxes instead of a portion of them.
Any state that eliminates sales tax gets the advantage of lowering the overall tax burden of their residents AND providing an attractive location for online retailers to build warehouses and provide jobs that increase the tax base for the state.
Would it not make sense to, in this case, institute a set amount of tax? Make Use Taxes a thing of the past; they are the worst possible kind of tax. It's a remnant of the possession tax, and it does no one any good. In any case, what should be happening is online retailers should be collecting between 0-10%, and sending it in for Federal collection. From this, the Feds redistribute to the states directly. I'd prefer 0%, but if a tax is to be collected, I don't want my state forcing me to self-report on something that is entirely confusing and desperately unnecessary.
This is not about taxes at all, it's about warrantless searches from the state to turn over your personal transactions. It's also legal thanks to GW so I'm not sure Amazon has a case.
Ok, I live in a different state than Mom does. I purchased a HDTV for her a few months ago through Amazon and had it shipped to her. Sales taxes were not collected from her or me since neither of us live in a state that Amazon does business.
Would it be considered "racketeering" if I created a way to align purchases between people buying stuff from Amazon and shipping it to someone else in a different state? I'd prefer to set this up between people more than a few states away from each other - NC and SC would probably start sharing information, but NH and GA would not. If someone else does this, I want credit on the patent - even though we all know that software patents suck.
If the state is looking to try to crack down on people who didn't pay the use tax (and who has on a personal return, seriously?) then a request for aggregate purchases by year might be considered as a reasonable request.
To try to find out EXACTLY what was purchased is wrong. No qualifiers - just wrong. How is this different from asking the book stores to do the same thing? Video rentals? Library usage? It all works out to the same thing if they want to know who purchased what.
I cannot think of any reason why the detailed purchase information would be of any legitimate use to a state government if they're talking tax revenue.
Note that I'm completely disregarding any discussion on the particular state's taxation practices, perception of their government, comparison to other states, and other things that are tangential to the subject, which seems to be the privacy of purchase information. Kudos to Amazon for fighting this rather than just rolling over and turning over the records. At least the state didn't try to invoke some kind of Patriot Act secrecy provisions.
This is pretty simple. North Carolina is bluffing, hoping that Amazon will not take this to the federal appellate courts.
There is longstanding legal precedent banning government authorities from requiring bookstores or libraries to disclose information about a customer's interests. This has been litigated repeatedly, all the way to the U.S. Supreme Court; the rulings have subsequently been applied to videotape/CD rentals as well. There is related case law pertaining to the subscription lists of magazines and newspapers--but that's a slightly different subject.
Brief synopsis of legal history:
A brief synopsis of bookstore and library privacy issues can be found at ReaderPrivacy.org.
But there's a bit more
As the Reader Privacy article notes, the PATRIOT Act (rushed into law immediately after the 9/11 tragedy) specifically gives the FBI the ability to subpoena purchase records from bookstores, as well as borrowing records from libraries. However--that power is limited to the FBI (although it can probably be exercised by other federal law enforcement agencies)--but it requires a federal judge to sign the warrant, based on probable cause, naming a specific individual. That gives no support at all to a state sales tax authority asking for a complete data dump of 7 years worth of purchase transactions.
In short--this will annoy Amazon's management, provide hefty fees for a bunch of lawyers, and produce a grand total of zero revenue for the state of North Carolina.
The Federal Government, like all state governments, has gotten out of control. Trillions of dollars in useless spending(I am talking about actual useless spending, not important spending, i.e. Military, enforcement, etc) and it does not appear to be getting any better. This is not a new trend, as this as been an issue for a long time.
Military spending accounts for half of the Federal budget. You cannot lower taxes and wage two wars at the same time you have hundreds of military bases scattered throughout the globe and not have a deficit. That's pretty basic macroeconomics.
Just how long does the EU believe it can fund every lazy person's wet dream(s) before it goes bankrupt?
Germans have the right to vacation time. They're also the only competition China has in worldwide exports. France has a nationwide network of nuclear power plants and high speed electric rail. London is one of the financial capitals of the world. And guess what? All of those places have a strong middle class, a good education system, and generally have lower poverty rates and happier and healthier populations than the United States. Your inability to accept that they may do some things better than us is evidence of immaturity.
I know that a VAT would seem a better solution(though not perfect, as you said), but it is not. It would kill businesses that rely on people traveling to get "a better deal", due to lower sales tax in certain states. I see it all the time between Tennessee and Georgia.
This is like saying that regulating deceptive banking practices would hurt deceptive banks. Who cares? A business model based on tax loopholes is not a business model. It's a currently legal scam.
I would rather keep my ability to log in at any time and see my own entire purchase history.
Yes, the government needs to know what book you bought, not just how much you paid for it. /sarcasm off
I hope this is the part that is frightening people, not that the feds are trying to get more $..
---- Booth was a patriot ----
Ok ok, i typoed i meant 'states'...
---- Booth was a patriot ----
I'm not pro tax, but Amazon's argument is weak. They could provide that info adn just list the items as book or DVD and satisfy the requirement. Then the only privacy violated is that someone orders books or DVDs or some other general merchandise type.
Also, people who say it will be a burden to implement tax code for 50+ states into their store also have a weak argument. If that were q requirement, there would both be services providing daily updates for tax code by zip code, and there will be services you could send those tax revenues to with generalized sales data who would distribute that $$ for a small percentage. Neither of these would break the bank for even the smallest retailer. Anyway, if you were that small, NC or whoever won't care to collect the $17/year you sell to their residents.
Ninjas don't carry tic tacs
Comment removed based on user account deletion
Make some sort of agreement. Have states create an Internet sales tax rate, based on the average sales tax rate. That is, net sales times the rate for one area plus net sales times the rate for one another area, all divided by the total sales. That would be the state Internet sales tax rate. Then, the company would only charge that rate, if out of state, and remit it to the state. The state then would use a formula to distribute it among the localities based on a fair and just formula.
You first... ;)
Michael J. Ryan - tracker1.info
Yeah, me, too. Sometimes I see something online, but I don't know whether I've bought it already, so I check my history.
Except, the law in NC that states that one must pay sales tax on items bought by mail has probably been around since before the internet. Ignorance of said law is no excuse. There is nothing unfair about this. No one is being retroactively screwed.
Oh, and NC can not go after most of these retailers because they do not have a physical presence in the state. Business in the state are required to collect the tax. Taxes on items bought by mail (or, in some cases, items bought in from out of state) are the responsibility of the purchaser.
Most state governments have no jurisdiction over the "Wall Street ratings agencies". If the rating agency does not have a physical presence in a particular state, then the agency is not under the jurisdiction of said state. The states could sue the agencies, if the state itself lost money. But, did the state, or did the independent retirement fund lose money. If the latter, then it would be the fund that would have to sue.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
North Carolina already had a fight with amazon last year (about this time) over tax collecting and lost. Last year it was over Amazon collecting taxes if the item was sold by a link provided by an Amazon Associate located in North Carolina. Amazons solution to this? They just killed all the associate accounts in NC. I am a NC resident and was an associate... while I lost a few thousand a year in play money I am so glad Amazon chose this path... and north carolina lost out on the income tax from all those associates... ha ha ha. The VA border is about 30 minutes from me... I have been considering the move. I rent and its not that big of a deal.
Well, he did say their school systems were crap.
http://techcrunch.com/2009/06/17/amazon-associates-to-pull-out-of-north-carolina-due-to-unconstitutional-tax-collection-scheme/
The upside to public employment is you've got to really suck to get fired.
Actually, it's a downside, especially if you're newer or lower on the ol' totem-pole. You might do 2x as much work as Bob in the next cubicle. Heck, he might goof off 80% of the day, but if there are cut-backs - and he's been there longer - guess who gets canned? Not to mention that your own work/stress load would probably be a lot less if you weren't also compensating for Bob's lack of effort.
I have dutifully kept track of all untaxed Internet purchases since I started buying online. And I reported said purchases every year on my state income tax in NC. These bureaucrats have no business nosing around in my purchases. I will be grouped with those who have not. Then what happens? As screwed up as they are in Raleigh, will I be taxed again?
Except, the law in NC that states that one must pay sales tax on items bought by mail has probably been around since before the internet.
Well, I, a lifelong NC resident, remember this whole "buyers are on the 'honor system' to pay use taxes" routine from about 20 years ago when it was all about out-of-state mail-order catalog purchases, so, depending on exactly how you define "the internet", you're probably right.
I see even classic Slashdot is now pretty much unusable on dial up anymore.