In a case that could have repercussions here in Oklahoma, online bookseller Amazon has filed a lawsuit against North Carolina’s tax agency, accusing it of wanting personal information about Amazon’s customers in the Tar Heel state.
The Associated Press has more here.
Amazon filed the lawsuit Monday in federal court in its home state of Washington. (Read a copy of the complaint.) From the lawsuit:
The [Department of Revenue] is auditing Amazon’s compliance with state sales and use tax laws. To date, Amazon has cooperated fully with the audit, providing the DOR with voluminous information about its sales to North Carolina, including, for each transaction: the order ID number; the city, county, and zip code to which the item was shipped; the total price for the transaction; the date of the transaction; and Amazon’s standard product code for each item (known as the Amazon Standard Identification Number or ASIN). With these product codes, the DOR is able to immediately find on Amazon’s website the full description of every product purchased by Amazon’s North Carolina customers since 2003 – nearly 50 million items in all.
As the AP story notes, states are desperate for all kinds of revenue amid the recession. Lawmakers in Oklahoma are still crafting the state budget for FY 2011, but Gov. Brad Henry has recommended expanded tax collections, including those for online sales. (The Oklahoma Policy Institute has a good discussion of streamlined sales tax collections.)
There is no allegation by the DOR that any of the products Amazon customers purchased is in any way unlawful. Rather, the identities and expressive choices of these customers have become subject to government scrutiny only because those products were purchased from an out-of-state retailer. The DOR’s actions threaten to chill the exercise of customers’ expressive choices and to cause Amazon customers not to purchase certain books, music, movies or other expressive material from Amazon that they might otherwise purchase if they did not fear disclosure of those choices to the government.