Federal Judge Stops NC’s Privacy Invasion

I live in North Carolina. It’s a pretty state. You get a taste of the winter months but you don’t get a lot of winter weather per se. Sure the summers are hot but that’s what air conditioning is for. Overall, it’s a great place to live and raise a family.

That is except for the state government and their attempts to collect taxes on online purchases made from Amazon. They have already pushed Amazon far enough that the online retailing giant ended its affiliate programs with North Carolina residents in 2009 thus depriving residents of the chance to bring money into the state that would be spent in the state and would give some ailing jobless folks a chance at survival. Nice move!

Apparently, Big Brother is alive and well in the Tar Heel state as well since the state government has been trying to get detailed purchase information from Amazon which would include names and addresses of those making purchases from 2003 to 2010. Fortunately, a federal judge has called the state on its draconian efforts and handed them a major setback in federal court yesterday. cnet reports:

In a victory for the free speech and privacy rights of Amazon.com customers, a federal judge ruled today that the company would not have to turn over detailed records on nearly 50 million purchases to North Carolina tax collectors.

The state had demanded sensitive information including names and addresses of North Carolina customers–and information about exactly what they had purchased between 2003 and 2010.

U.S. District Judge Marsha Pechman in Washington state said that request went too far and “runs afoul of the First Amendment.” She granted Amazon summary judgment.

The Tar Heel State’s tax collectors have “no legitimate need” for details about the literary, music, and film habits of so many Amazon customers,” Pechman wrote. “In spite of this, (North Carolina) refuses to give up the detailed information about Amazon’s customers’ purchases, while at the same time requesting the identities of the customers and, arguably, detailed records of their purchases, including the expressive content.”

With privacy victories coming too few and far between these days at least we can feel like someone is paying attention and not letting the government run rough shod over privacy while squashing commerce in the process.

I suspect that the state feels they have good reasons for doing what they are doing. They will say that the taxes they want to collect will help the state. Pardon my cynicism, but if the affiliate money that was once coming onto the hands of the residents were turned back on that would REALLY help the state.

At the heart of this ruling though is privacy.

In addition, the ACLU intervened in the lawsuit asking for an even broader injunction against the tax collectors. They wanted Amazon to be prohibited from disclosing customer purchases without a subpoena, which the court did not grant.

In general, as Amazon stressed in its lawsuit, purchases of books, DVDs, Blu-Ray discs, and other media enjoy special privacy protections.

So what is the North Carolina government trying to do here? At the core, it’s trying to collect taxes from both Amazon and its citizens because of online purchases. In the process, it is killing an avenue for commerce in the state and appearing as if it wants more data on its residents in a time when that is not considered such a good thing. I don’t get it.

In the end the state is only hurting itself though because as people learn about these attempts they will maybe stop short of saying they will set up a business in the Tar Heel state for fear of too much government intrusion. Sadly, no one wins in that scenario.

What’s your take on the idea of taxing online purchases? It’s an old story but one that will likely get more attention in these days of scarce money. Have you been impacted by rulings like this in any other states? What’s worse, more taxes or invasion of privacy to collect them?