North Carolina has asked online retailer Amazon.com to turn over the names and addresses of every customer who has made a purchase on the site since 2003 and what they bought. The N.C. Department of Revenue is making the request in an attempt to audit Amazon’s compliance with state sales and tax laws, according to a Reuters report.
Amazon says revealing this data violates customer privacy and has filed a lawsuit to prevent having to turn over the records, which hold the transaction details on 50 million purchases over a 7-year time frame.
Government Wants Names, Addresses and Purchase History
In a lawsuit filed Monday in the U.S. District Court for the Western District of Washington, Amazon states that North Carolina has no need for the personal details of its customers – details which include full names, addresses and information about exactly what they purchased and when. The Internet retailer had already given the state information on what has been sold to N.C. residents, but in the form of anonymized data, which should be sufficient.
North Carolina, in turn, is now threatening the retailer with contempt proceedings if they don’t hand over the requested records.
The issue at hand, and likely the reason behind the request, has to do with N.C.’s sales tax laws. Amazon doesn’t maintain any offices or warehouses in the state, so they are not required by law to collect sales tax on purchases. However, last year, the state passed a law that required retailers like Amazon to collect tax in the state if they ran marketing affiliate programs, which Amazon does. Amazon responded by shutting down Amazon.com Associates in N.C., the referral program that allows website owners to advertise Amazon products via links, banners, widgets and embeddable “mini-stores” on their websites and blogs.
Despite the program’s shutdown, N.C. wants to find ways to collect back taxes on sales that took place before the law went into effect.
Right to Privacy or Right to Tax?
Amazon has already given the state order numbers, city, county, zip codes, transaction dates, prices and product codes for seven years worth of purchases – information routinely requested in audits like this. But asking for personally identifiable information goes too far, says the retailer.
In the filing, Amazon says N.C.’s demands violate customers’ First Amendment rights, Washington state law and federal law. Now it will be up to a federal judge in Seattle to rule as to whether or not this demand is, in fact, illegal.
Beth Stevenson, the N.C. Department of Revenue’s director of public affairs has not yet commented on the lawsuit Amazon filed saying the agency needed to review it first.
