Amazon Fights North Carolina Data Demand

Amazon has filed a complaint seeking to block an effort by the North Carolina state government to force the company to turn over personal information for residents who have purchased anything from the company since 2003.

Amazon's complaint, filed in U.S. District Court for the Western District of Washington, stems from North Carolina's effort to audit the company's compliance with state sales and use tax laws. Amazon contends North Carolina doesn't need personally identifiable customer information to audit the company and to do so would violate its customers' privacy. Last year, North Carolina followed New York in passing a law that required out-of-state retailers to collect sales tax in the state if they have marketing affiliates -- people who earn a fee for providing links to online retailers on their own Web sites -- in the state. Amazon responded by severing ties with affiliate marketers in North Carolina, and currently doesn't collect sales tax there. However, North Carolina officials said earlier this year they were still discussing other ways to collect sales taxes from online retailers, including asking them to pay back taxes for sales that occurred even before its law went into effect. Amazon said it has already has cooperated fully with the audit, providing the state's Department of Revenue with voluminous information about nearly 50 million items sold to North Carolina customers, including order numbers; the city, county, and zip codes to which items were shipped; transaction dates and prices; and Amazon's standard product code for the items. Amazon has asked the court to declare that the state's demand for personal information violates First Amendment rights of the company and its customers, as well as the Washington state constitution and federal law.