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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
There's a difference between seeking to avoid paying their taxes (finding shelters, etc. like Google), and refusing to help the state violate the interstate commerce clause (like Amazon is doing here).
Benford's Corollary to Clarke's Law: "Any technology distinguishable from magic is insufficiently advanced."
Amend the Constitution? Inter-state federally administered taxes?! Good luck getting that through in the current political climate.
Man who leaps off cliff jumps to conclusion.
How about we dismantle the welfare state like Europe is being forced to do?
Because most of Medicare and Social Security -- the only entitlements large enough to put a dent in the budget -- are collected disproportionately by retired people, who in turn are A) a growing demographic and B) vote very reliably, relative to just about any other demographic.
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.
Trust me, looking at how much NJ takes out of my paycheck (and I'm on the lower end of the scale for this area) they should be able to run the state on Income and property taxes alone. Most states have completely unrealistic budgets, rather than adding more tax what needs to be done is trim down the spending.
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...)
We already have a commander-in-chief and a Congress that doesn't give a shit about public opinion.
Would that be the same commander-in-chief who campaigned very clearly on doing pretty much all the things he's done?
Because see, the way we actually track public opinion in this country is by having elections.
Why not? We've passed many amendments, including stupid ones. Like the banning of alcohol. How in the world that ever managed to get 75% support is a mystery.
Besides amending the Constitution IS the proper method of extending the US Congresses' authority. Otherwise laws will be nullified by the 10th amendment. (Powers not given to the US are reserved to the States or the People.)
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
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
We don't have to "kill" Medicare or SS.
We simply need to sell it properly. "In order to save social security and make sure YOU will always be assisted in paying your bills, I propose we eliminate payments to the Rich! The rich don't need help - you do. Time to cut them off from receiving benefits." (crowd cheers) And then install a $5 million cap on lifetime income. If you earned more than that, you are ineligible to receive SS or Medicare checks.
That would help save the system from bankruptcy.
Then in 2020, the cap could be lowered to 3 million... again, to save the system for "you the hard-working middle class".
Then drop it again in 2030 to 1 million.
Eventually over time it will no longer be viewed as an entitlement, but as a Safety Net that excludes the rich, and is only used as a last resort by middle classes. This is how you make change - not all at once, but progressively over time and over decades.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
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.
>>>Because see, the way we actually track public opinion in this country is by having elections.
Not true. We also track public opinion via Citizens' calls to the Congressional representatives. In October 2008 the phones were overloaded with citizens saying, "Vote No on the bailout bill," and it passed anyway. Then the same thing happened again in the week prior to the Healthcare Reform Bill ("vote no") and it passed anyway. The calls were approximately 75% and 70% against these bills.
So the previous poster is correct. The Democrat-supermajority Congress is ignoring the constituents - you might as well not bother calling, because they won't listen anyway.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
No I mean spending in general, some of which may be in the school system if there is excess there, some of which will be elsewhere. I do find it interesting that you instantly assume I want to slash all the school budgets though...
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"
Social Security and medicare damned well better NOT be dismantled. I've been paying into it for forty years for the express purpose of collecting if I manage to survive long enough to collect. FICA is for my social security, and there's a mdeicare tax listed on my pay stub, too.
How about we just take your 401k away when you retire? It's the same damned thing.
Free Martian Whores!
Not true. We also track public opinion via Citizens' calls to the Congressional representatives.
We could track things that way, but since people will always be more fired up and likely to call against rather than for something, that would be a stupid way of doing it.
Elections have worked for America (for some value of worked) for over 200 years. It's good enough for anyone who doesn't hate the Constitution.
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.
>>>Because see, the way we actually track public opinion in this country is by having elections.
Not true. We also track public opinion via Citizens' calls to the Congressional representatives. In October 2008 the phones were overloaded with citizens saying, "Vote No on the bailout bill," and it passed anyway. Then the same thing happened again in the week prior to the Healthcare Reform Bill ("vote no") and it passed anyway. The calls were approximately 75% and 70% against these bills.
So the previous poster is correct. The Democrat-supermajority Congress is ignoring the constituents - you might as well not bother calling, because they won't listen anyway.
No, all you just proved is a majority of the callers were people opposed to the bill. Completely different from a majority of the people being opposed to the bill. The people who are happy with the state of affairs rarely call anyone.
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
Oh, I so wish the "Democrat Super-majority Congress" was ignoring the minority, but see, the truth is that the Dems don't vote as a solid block like the Repubs do. If the Democrats in general and Obama in specific had take a "screw you guys, we've got the numbers and we're going do do what we want" then we wouldn't have ended up with such a massively messed up health care bill - we would have had the strong public option instead of this giveaway to the big Insurance companies.
What I've seen is Obama trying to play nice and include the Republicans in the process, and the Republicans returning the favor by filibustering everything, and generally taking the tack that anything Obama wants is bad.
It's as if they've got it in for him or something.
Basically my problem with Obama is that he's trying too hard to be nice - to find the center and compromise. What we need is for him to kick some ass. He's going to get blamed for it anyway, so why not at least get something worthwhile done?
The Digital Sorceress
Use taxes don't violate the Interstate Commerce clause. Not even Amazon claims that. Here is a pretty good explanation of how state taxes interact with the Interstate Commerce clause. Note that a tax is illegal only if it discriminates against Interstate Commerce, and particularly note the heading Discriminatory Taxes May Be Valid as Complementary Taxes.
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.
We also track public opinion via Citizens' calls to the Congressional representatives.
Also not true. According to the non-profit, non-partisan Congressional Management Foundation: "Ultimately about 82% of all citizen action in the United States is generated through these teams at third-party organizations such as the AARP, Greenpeace or Focus on the Family, producing anywhere from 300 to 2,000 email messages delivered to each Congressional office every day - not to mention the barrage of Tweets, Facebook posts and other messages." That includes phone calls by the way. It may just be a Democratic Congress ignoring their constituents, but it's more likely congress ignoring the lobbies that our wealthy constituents pay for. (Interestingly, the same lobbies the Republican Congress ignored when they ran the place too... ;)
And, of course, retired people have spent decades, most of them all their working life, paying into Medicare and Social Security. Doubtless many of them would be reasonable about ending such entitlements if they got a refund of all the money that went into the system under their name, with inflation adjustments and a reasonable interest rate.
Not only do they have a very high voting rate, and financial incentive to keep these entitlements going, they're owed a lot of money in some way.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Courts may have held that "complimentary taxes" are valid, even though they're discriminatory on their face (the record keeping required, if nothing else). But that doesn't mean that they're not violating the intent or wording of the Constitution—they do both—just that the courts don't care to ding the states for it.
Benford's Corollary to Clarke's Law: "Any technology distinguishable from magic is insufficiently advanced."
You claim it violates the intent or wording of the Constitution, but can you provide a citation? Or is that just your opinion?
I only ask because a lot of people (myself among them) think you're wrong, so you might want to provide some factual basis for your claim. Note that I have provided a citation for my position, that being a long history of decisions by the courts who are, in fact, an authority on the matter considerably higher than "slashdot user Chaos Incarnate". For a start, they've actually studied the intent of the clause.
My apologies to Nevada.
Blar.
The gun control people haven't been able to amend the constitution, hell they don't even seriously consider it anymore. How much luck do you think a *tax* amendment would have?
For better or worse (note: worse), the Constitution is no longer thought of as a "living document" but is how some kind of holy declaration from on-high chiseled into stone.
Comment of the year
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."
We'll begin with closing off your kids' school and bus transportation and the bridge you're using to drive to work, so that you have to drive a 50 mile detour to drive your kids to a new school. See how you like it.
Completely unnecessary. 30 years ago, in my state, the sales tax was 4% and the income tax rate was around 1%. Schools and roads were getting by just fine. Now, incomes have gone up, sales have gone up, AND the tax rates have gone up to where sales tax is now 8% and income tax is 2.6% and the schools and roads are barely able to squeak by.
Median income has raised by a multiple of 4 in 30 years, and the rate of taxation on that has more than doubled. Inflation numbers say that it should cost 2.5 times to run the state as what it did 30 years ago, assuming the SAME tax rate. So they should be having an excess because income has risen by a factor of four. But they are unable to fund the schools despite having more than DOUBLED the tax rate on FOUR TIMES the income. Property Tax rates have similarly gone up, while the median value of property in the state has risen at a rate much higher than inflation. Clearly, my state, like most others in the U.S., is very bad at simple percentage based math.
If you are not allowed to question your government then the government has answered your question.
the "why" of it is not my point - with the Tea Partiers holding sway over the political climate right now, it'd be a near impossibility. Their call to "respect the constitution as it intended by the founders" (paraphrasing, but you get my point) flies in the face of the fact that there are 27 amendments to it that we currently live with, and makes it highly unlikely that further amendments that carry the perception of increased government control would ever go through.
Besides, the governance of interstate commerce and the ability to tax & regulate that is already granted to the Federal government through the Commerce Clause.
Man who leaps off cliff jumps to conclusion.
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.