Lists that identify the books, music and movies that individual customers bought from online retailer Amazon.com Inc. are protected from North Carolina tax collectors, a federal judge has ruled.
Amazon argued in a lawsuit filed in April in its hometown of Seattle that disclosing the names, addresses and purchases of its customers as requested by the North Carolina Revenue Department would harm anyone who may have bought controversial books or movies. The U.S. District Judge hearing the matter agreed, and ruled late Monday that the First Amendment protects buyers from the government’s demanding to know the books, music and audio visual products they’ve bought.
Amazon and the American Civil Liberties Union, which later joined the case, "have established that the First Amendment protects the disclosure of individual’s reading, listening and viewing habits," Pechman wrote. At stake are potentially millions of dollars in taxes that North Carolina contends Amazon was responsible for collecting for years before a state law was changed last summer.
In 2008, New York became the first state to treat local affiliates as enough of a state presence to require retailers to collect sales taxes. Colorado and Rhode Island also passed tax-enforcement laws, and as in the case of North Carolina, Amazon cut its ties with the local affiliates in each state with such laws.
These affiliates were residents who linked to products on their blogs, promoted Web shopping deals and offered coupons promoting Amazon purchases. It remains to be seen how the ruling in the North Carolina will impact the tax collection activities in Colorado.
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