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.

Comments

This is where the FTC could really step in

[BadAnalogyGuy]

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.

Re:This is where the FTC could really step in

[Late Adopter]

Not sure where you're getting unconstitutional from... The Supreme Court explicitly ruled use-taxes constitutional in Henneford v. Silas Mason Co. (300 US 577, 1937), provided the tax "is not so measured or conditioned as to hamper the transactions of interstate commerce or discriminate against them" (read as: as long as Use Tax isn't larger than the Sales Tax).

Re:This is where the FTC could really step in

[bigdavex]

Suppose two parties privately sell an item in one state and then the new owner transports the item to a second state. He uses the item in the second state. Tax is paid in the first state. The tax is paid on the transaction not on the use. So how can the state say with a straight face that this is a "use tax"? It's clearly linguistic gymnastics to circumvent the commerce clause.

Why Amazon?

[Anonymous Coward]

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.

Re:All these states should be like New Hampshire

[matt_king]

I think my state (Massachusetts) tried to sue a tire company in NH for this same info, and eventually lost (could be mistaken, it was a year or two ago)...precedent?

On the other hand

[Anonymous Coward]

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.

Re:On the other hand

[Omestes]

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.

I'm not a libertarian, nor conservative, I actually am a lefty bordering on socialist, and I somewhat agree with your statement. I live in Arizona, a state that recently decided to close down most of their parks and rest-stops, and gutted their already second worst in the US education system, for lack of money. The state is making less money than it has in years previous, but it still is making more money than it did a long time ago when it had parks, education, and police. This state has always been known for its shitty services, even in good tax years. So it makes me wonder where the hell all this money goes?

And now their are basically blackmailing voters by saying "vote for a 1% sales tax, or we'll take away your cops, firefighters, and universities".

I'm all for the government collecting taxes and putting it into programs that benefit the people, but this doesn't happen. The government collects money and it somehow disappears.

I'd be in favor of very high taxes if our government wasn't run by clowns, and the money actually benefited the public. I don't think most US political fiefdoms are there yet.

keeping records? for how long?

[StripedCow]

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...

Property taxes fund the majority of schools

[Shivetya]

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.

Re:Property taxes fund the majority of schools

[Anonymous Coward]

Posting AC. As a Federal employee, I can tell you that our retirement is not "plush" and hasn't been since CSRS went away. Now we have a small (reasonable) pension and a 401(k)-like account called a TSP that has a small match (5%).

Given that as an attorney I make far less with the government what I would in the private sector, yet I go to work every day happily, believing in what I do, and working hard, my retirement benefits are perfectly reasonable.

Re:Property taxes fund the majority of schools

[Anonymous Coward]

State employee here.
Most young people I work with are pretty much only here for the benefits. If I stick with the State, I'll have made anywhere from 20-100% less than my peers (depending on factors like location and willingness to travel) for the course of my career, I've been 4 years now without a raise, despite being a dedicated and productive employee (I did no programming when I started, and now I am, yet I'm still making the same salary). I've been with the State for 10 years now, and of those 10 years, the only raises I've seen that weren't from me changing jobs were ~3% COL increases, which has happened 4 times. That's pretty crummy, considering the absolutely insane amount of growth the state saw over the past decade.

However, if I stick with the State, I'll be eligible to retire with full benefits before I'm 55. If you're on the pension plan here, that's it. There's no 401(k) with % matching contributions. Anything extra comes out of pocket (like my 6% deferred compensation contribution).

The bargain has always been understood that to be a public employee, you won't make as much, but you'll be taken care of if you stick with it.

Re:Property taxes fund the majority of schools

[ProfBooty]

I'd say FERS is fairly generous compared to a private employer. I'm a GS-14 and if I was to retire with 40 years of service I would get 44% of my 3 year average high salary, which would be roughly 61k a year in pension on top of TSP. You can also continue FEHB as well, assuming you have at least 5 years of service, though I am unsure if you are required to pay the entire portion or not.

Re:All these states should be like New Hampshire

[NotOverHere]

Disclaimer: I grew up in NH.

And Tax-achusetts is doing soooo well with it's superior roads and schools. Must be something up when the only visible tax is property tax, and the visible use of taxes (roads and schools) are doing better. Or that with no sales taxes, the malls just over the boarder have more cars with Mass plates than NH (even with the price increase that comes with passing property taxes on to the consumer). The Pheasant Lane mall is mostly in Tyngsboro, but the main office is in Nashua, and the mall tenants only pay for property tax, no sales tax.

Or how the Mass Pike was supposed to abolish tolls once it "broke even"? For the Pike west of Worcester, I've only seen worse roads in NY.

Re:This is SOOO stupid

[Montezumaa]

That is not the way the United States Government, nor any of the state governments within the United States, works. The way the United States was initially setup, the states actually passed whatever amount of money they deemed appropriate to the Federal Government. Since the Federal Government was very limited(as it is supposed to be, per the U.S. Constitution), it did not need a huge volume of money to operate effectively. Fast-forward to today and it is a totally different scenario.

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.

If people are so enamored with the European's way of life, then those people need to move to Europe. It might seem cool to live in a place that sees vacations as a "human right"(not joking: http://www.timesonline.co.uk/tol/news/world/europe/article7100943.ece), but such stances are starting to get rather unfunny. Just how long does the EU believe it can fund every lazy person's wet dream(s) before it goes bankrupt?

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.

I also seeing this as a big hit to commerce, as people would quit spending near as much and many families would suffer. If a VAT were added only to luxury items(actual luxury items and not what government views as "luxury"), then I might concede the point, but that is doubtful. Food and other needed items would get more expensive rather quickly with a broad VAT were enacted.

Also, do you want to have to beat your head against the brick wall that is the IRS if they decide a merchant did not impose a high enough VAT against you? Answer: No.

Political tool

[michaelmalak]

The CNet article mentions the Video Privacy Protection Act but not the events leading up to it. The Slashdot summary, of course, doesn't mention it at all except vaguely that the videos "deserve enhanced protection".

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.

Re:NC is desperate for money

[sglewis100]

Hell, in Winston-Salem, they just built a minor league baseball stadium, using mostly tax money, for a mere 30 million or so.

While I'm FAR from supporting tax-payer funded stadiums in most cases, there's a huge difference between a five hundred million park for a professional team threatening half-heartedly to move and an affordable stadium meant to lure or keep a low revenue minor league park.

Minor league teams are great for families (bring a family of four for the price of one ticket in a major league park), and it's very feasible that the tax collected over the life of that stadium will absolutely exceed 30 million. So it may very well fund a road or two. Beats another toll road every day...

Re:What Amazon needs to do ...

[christrs]

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).

Get rid of sales tax

[frinkster]

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.

This is a settled Constitutional issue...

[John Murdoch]

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.