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Amazon Contests Tax Data Demand

by Mike Godfrey, Tax-News.com, Washington

21 April 2010


E-Commerce giant Amazon.com is contesting a demand from the North Carolina Department of Revenue (DOR) to turn over the names and addresses of virtually every North Carolina resident who has purchased anything from Amazon since 2003, along with records of what each customer purchased and how much they paid.

Amazon claimed that, if it was forced to comply with this demand, the disclosure would invade the privacy and violate the First Amendment rights of Amazon and its customers on a massive scale, and that the DOR did not need personally identifiable information about Amazon’s customers in order to audit Amazon’s compliance with state tax laws. All it needed to know, according to Amazon, was what items Amazon had sold to North Carolina customers and what they had paid. The retailer claims it has already provided that information to North Carolina.

The DOR had been auditing Amazon’s compliance with state sales and use tax laws and Amazon said it had cooperated fully with the audit, providing the DOR with reams of information about its sales in North Carolina, including links to every product purchased by Amazon’s North Carolina customers since 2003 – nearly 50 million items in all. In spite of this co-operation, the DOR threatened Amazon with an administrative summons and summary contempt proceeding if it did not turn over the name and address of each customer.

North Carolina is one of several states that passed a law last year requiring out of state retailers to collect sales tax in their state if they had marketing affiliates located there. Amazon continues to contest the first (New York state) law and has broken off its business relations with affiliate marketers in other states, including Colorado.

According to some reports, North Carolina officials are also considering a demand of back taxes from online retailers for sales dating back to before the present legislation.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: compliance | tax | business | sales tax | commerce | law | audit | internet | e-commerce | legislation

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