Amazon Pulls The Free Speech Card To Fight The Tax Collector

Amazon (NSDQ: AMZN) is making a very bold argument in its latest standoff with state tax collectors: The company charges that North Carolina — which is conducting an audit into whether Amazon is complying with its tax laws — wants it to turn over the name and address of every North Carolina resident who has bought anything from the e-commerce site over the last seven years.

That, Amazon says in a court filing (via TechFlash), would “invade the privacy and violate the First Amendment rights of Amazon and its customers on a massive scale,” adding that customers could be linked with “sensitive or personal books” they have purchased.

Not so fast, says North Carolina Revenue Secretary Kenneth Lay, who tells the Associated Press his state doesn’t want to know what people specifically purchased, but instead how much they paid.

North Carolina is trying to get Amazon to pay state taxes that the e-commerce company managed to avoid for years by not having any physical operations or employees there. That all changed last summer when North Carolina, like other cash-needy states, put into place a new law that required out-of-state companies to collect sales taxes if they had marketing affiliates located in state. Amazon promptly cut its affiliates in North Carolina to avoid the tax — but North Carolina still wants Amazon to pay up for past years, according to the AP.

The consensus is that it’s going to be difficult for Amazon and other e-commerce retailers to avoid collecting state taxes long-term. As we wrote last summer, however, the consolation for Amazon is that in markets where Amazon does collect state taxes, it has nevertheless continued to grow.

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