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Amazon Prevails In State Sales Tax Dispute, Thus Far
snsh writes "A US judge has ruled for Amazon.com (PDF) against North Carolina's request to turn over the names of its customers to state tax officials. The ruling was focused on privacy grounds, so the state can still re-request less detailed sales data which does not identify items purchased."
Reader arbitraryaardvark adds a link to The Volokh Conspiracy's take on the decision.
The outcome of this case affects not just Amazon, but also its sellers.
"No taxation without representation" is the principle. Why should I be subject to taxation by a foreign government (Carolina) when I have no voice in their legislature? It makes as little sense as saying a Frenchman should have to pay income tax to the Polish government. My allegiance is to MD and US..... any other governments have zero authority over me.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Why do so many of them seek to avoid paying their taxes, then?
For the record, I love that Amazon.com doesn't collect sales taxes. It doesn't matter if you're talking about state or federal government - they both are continually seeking to make you scale back your lifestyle so they don't have to. How about we dismantle the welfare state like Europe is being forced to do? Why don't we do it now before it becomes too painful later, as France is finding out?
The times have changed, and it is time to ammend the constitution with inter-state sales tax.
Our founding fathers could never have envisioned the power of our current transportation and communication systems. Charging interstate sales tax is trivial these days. I do feel the pain of the small businesses online, but there is so much tax evasion going on that this is becoming irrelevant. It is time to end the party. State, county, and local budgets will thank us.
I must be mis-reading this..
As far as I can tell, all that has been ruled is that the state should not receive a lit of -what- books you have purchased.
Nothing to prevent them knowing the value of the books you have purchased, with the titles redacted, so you can pay your fair share of taxes like the rest of us.
Yet people here seem to be discussing things off at a tangent to this (like whether books should be taxed at all, a totally different subject really), who would have imagined Slashdotters doing that ;-)
"Oops, I always forget the purpose of competition is to divide people into winners and losers." - Hobbes
I believe felons only lose their right to vote while their sentence is in effect. Once they have served their time, including parole if any, I believe their right to vote is restored. However, IANAF (I am not a felon) so I don't have any direct experience with this.
This isn't the sig you're looking for... Move along.
The big issue here is that Amazon had previously sent transaction details (such as book titles, etc.) but without the user info. The state has these records on file - this judgement basically says that while the state has the transaction details, they cannot have the user information. If the state were to dump those details, Amazon might still be obligated to provide such information such as Joe Blow - $100 - Books.
This means for people like me, I still may be obligated to pay those back taxes (well, of course I paid them all already...)
Aren't these taxes more akin to state tariffs than sales taxes since most of the goods are only imported into the state? Doesn't that violate the commerce clause?
You are correct that things have gotten off topic, and a lot of people are missing what's actually going on here; however, it's not as simple as giving purchases with titles redacted...
Amazon is being sued to pay the taxes for purchases in North Carolina, not for everyone in America. They furnished NC's Department of Revenue (DOR) a list of all sales with ASINs (Amazon's Unique Identifier for products) from 2003 - 2010. NC needs the details because different kinds of products have different sales taxes. NC's DOR demanded that Amazon also provide the Bill-To and Ship-To information, which Amazon refused to do as this would violate the First Amendment by identifying the details of what NC residents were reading, watching, and listening to.
This is where it gets hazy... The DOR offered to give the original data back in exchange for data that identified people, but not the details of what they purchased, but the original data would be kept on the DOR Secretary's computer, because they needed some of that for... I dunno, it's hazy legalese. Amazon stated that the only way they have to identify what was purchased was ASINs, which would identify the products, so no deal.
The DOR admitted that this customer-identifying data would add nothing to establishing Amazon's tax-liability, but they still wanted it. Amazon got backing by the ACLU and the Judge ruled against the DOR.
This should be case-closed, but, as a resident of North Carolina, I'll be keeping an eye on it, and will be writing an irate letter to the editor of my local paper for not covering this story. Thanks Slashdot!
i ~ Celebrating Science, Cyberspace, Speculation
From the friggin judgment:
As part of an audit of Amazon, the DOR, whose secretary is Defendant Lay, sent a request on December 1, 2009 to Amazon seeking “‘all information for all sales to customers with a North Carolina shipping address by month in an electronic format for all dates between August 1, 2003, and February 28, 2010.”
So I honestly ask: what on earth are you babbling about? Or do you just like citing 'Merican phrases at random regardless if they're appropriate to the circumstances in question?
Your state gets about $0.60 spent on it by the Federal government for every $1.00 contributed in Federal income tax.
I bet if that money was spent in NJ, the budget problem would be easily solved. Same with CA, CT, NY and MA.
But it is being redistributed to states like NM, AZ, MI, MO, NV, etc...
Blar.
With all the efforts Sony has put in to their PSP and PS3 product lines being a bit more resistant to piracy, the idea of Sony putting their gaming software/hardware on to a phone where a Linux-based operating system is managing business for the end user would be a time bomb for the company. They would theoretically be giving the homebrewers and modders out there a more open window towards compromising or utilizing their software.
as nice of an idea as it is, I'm glad for Sony's sake that it doesn't
Tell this to all the local governments that have jumped on the bandwagon of taxing travelers to the max. It is infuriating to be hit with a 19% sales tax on a rental car and motel room when everything else is taxed at 9% or less. But they're all doing it, and all at slightly different rates.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
North Carolina's problem, like many states, is an over-reliance on state sales taxes. If they would reduce their sales tax to zero and increase other taxes to compensate, they would make their own businesses more competitive with Internet retailers like Amazon.com and eliminate the need to try to tax them. At the same time, this would encourage commerce and eliminate a regressive tax.
Any sufficiently unpopular but cohesive argument is indistinguishable from trolling.
SCOTUS already denied certiorari in the case of HUCKABY v. NEW YORK STATE DIVISION OF TAX APPEALS http://caselaw.findlaw.com/ny-supreme-court/1191744.html.
"[T]he State's power to tax *** activities is justified by the 'protection, opportunities and benefits' the State confers on those activities'" (Allied-Signal, Inc. v. Director, Div. of Taxation, 504 U.S. 768, 778, 112 S.Ct. 2251, 119 L.Ed.2d 533 [1992], quoting Wisconsin v. J.C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 85 L.Ed. 267 [1940]).
no taxation without representation eh?
will you exempt minors from paying sales tax?
will you exempt h1-b visa holders from paying income tax?
will you exempt corporations from all taxes?
will you exempt people who order things from the US from any export duty?
your argument while grandiose and part of all Americans common heritage, is not workable.
it is too simple.
Yes, you can argue that corporations have representation via Lobbying (and I think they do as well)
Same as the British argued that the members of the 'colonies' had such available representation.
If you want to make any process/decision/methodolgy based on the logic contained in FLAT EMPHATIC STATEMENTS,
you have to be willing to apply it in all situations.
So, do you want 'taxation without representation' or do you want a complex set of circumstances.
By the way- I don't believe states should be able to charge taxes across states like this
I think states should be separate socio-economic islands of policy, with an eye towards a sort of darwinistic economic effect.
(with great thanks to Lois McMaster Bujold for the origin of the following for me)
Stodgy states will lose business, residents, and corporate presence
Competitive & changing states will see an influx of new capital
The Carolinas & other non-presence states provide nothing for Amazon for the 'tax revenue'
The framework of delievery of goods however, is something those states benefit by.
UPS & Fedex buy fuel locally, (with taxes attached) and coincidentally employ citizens in connection with the delievry of goods.
If a state wants a piece of the business, they can create an enviroment where Amazon wants to give them a piece.
I agree with your resolution, I strongly disagree with your argument.
every day http://en.wikipedia.org/wiki/Special:Random
The case is not about you paying sales tax to a foreign government (Carolina). It is about you paying sales or use tax to your own state. This applies to all mail order only companies. If a business has a presence in the state you are buying, you pay sales tax to your local state. If they don't, you pay use tax to your state. However, states have no way of what you are buying from out of state vendors, which is why they are wanting the information. For sales tax, the vendor collects it and remits it on your behalf, so the state doesn't need to know what you are buying, they know what the vendor is selling.
For business that do have a presence in the state, they charge you sales tax, even if you mail order from them. That's why buying books online from Barnes and Noble you have to pay sales tax. Buying from Amazon, you don't. However, in most states, you would be liable for use tax from purchases from Amazon. But, nobody pays it voluntarily. The case is about getting the information so that the state can go back and charge you for your legally owed taxes.
BTW, use taxes apply to more than just out of state purchases shipped into the state (if you paid the sales tax in another state, then use tax doesn't apply). In most states, any purchase, even from a garage sale, is liable for use taxes. Most states, however, have a minimum that is reportable, so most garage sale purchases would be exempt. Also, the purchases of water craft and vehicles fall under different requirements and you have to pay local sales tax, even if purchased out of state.
The question that the courts are wrestling with is should businesses that are on-line only continue to get a competitive advantage against brick and mortar storefronts? The original sales/use tax laws are 100 years old in most states and no longer fit with the current technology.
The antiquated laws have forced many local shops to be non-competitive and to close. As such this costs jobs, which lowers the tax base and places higher requirement on social programs and unemployment. At least when Walmart moves into a community, and puts a bunch of local businesses out of business, they are still employing people in the community (although there tends to still be a net decrease).
The question really is whether online vendors should receive a competitive benefit through the tax structure, at the expense of local business. If you think yes, then you would be happy with the Amazon decision. If you think that all businesses should be on an equal footing when it comes to taxes, then you probably disagree with the decision.
My apologies to Nevada.
Blar.
Back in the 1980s, my wife was doing programming for a mail-order book store (which was like Internet commerce, only on paper :-) New York State wanted them to collect sales tax, and as you say, the taxes vary by county, town, township, etc., while the book store only knew customers' addresses and zip codes, and the tax rates weren't aligned by zip code. And different jurisdictions have different rules about what's taxable - for instance, in New Jersey, clothes aren't taxable, but in New York they are (so NJ people buying expensive clothes in Manhattan would often have them shipped home, because that was much cheaper than paying NYC sales tax.) And the number of cities thinking that it's a good idea to tax Evil Snack Foods but not tax Nutritious foods keeps going up, but definitions of which foods are Evil Snacks varies widely.
Today you can do better than that, because computers have lots more storate and CPU horsepower, and the Internet gives even small companies access to online services, so you could hypothetically look up your customer's address on Google Maps Tax Rate Tool to find out which rates apply to their geography, but the question of what's taxed and what's not is difficult.
Fortunately, the Constitution says that states aren't allowed to regulate Interstate Commerce, so even though New York and New Jersey had a mutual tax-sharing treaty, participation was voluntary, and since New York didn't make it easy to implement, her employer decided not to participate.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
The problem isn't new - snail mail interstate commerce has been around about as long as the Post Office, and companies like Sears, Montgomery Ward, and Wells Fargo's shipping service became major players in catalog-based interstate commerce. And Television let you buy Ginsu Knives and Chia Pets by mail without even needing a paper catalog.
States keep pretending it's a new threat to their revenue, but the main differences are that the web makes a much better catalog than paper, computer automation cuts the transaction expenses, and shipping's getting cheaper, so internet commerce is more practical, plus some goods are digital-only so there's no physical shipping required (e.g. music, movies), which makes it easier for a seller to not need physical presence in the buyer's state. On the other hand, state expenditures per capita and sales tax rates keep going up, and hardly ever go down, so states really really want this money.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
but don't believe that your business should be held accountable to the laws of that state? Really?
As for your refrain: You have representation at the Federal level, wheras the Fed regulates "interstate commerce."
the federal gas tax of 18.4 cents per gallon currently is a proof.
As I fly and click buy on my Kindle who knows what IP address is used and delivered to when I purchase a book. Or as the Nook switches from proxy server to proxy server.
Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; Truth isn't. Mark Twain.