RALEIGH, N.C. — Lists that identify the books, music and movies that individual customers bought from online retailer Inc. are protected from North Carolina tax collectors, a federal judge has ruled.
Amazon said in a lawsuit it 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.
U.S. District Judge Marsha Pechman 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.
Last year, state legislators passed a law making Amazon responsible for collecting sales taxes because it had a network of local affiliates — North Carolina residents who linked to products on their blogs, promoted Web shopping deals and offered coupons.
Before the change was adopted, Amazon cut its ties to those North Carolina affiliates. The company also stopped working with affiliates in Rhode Island and Colorado because of collection-enforcement laws passed in those states.
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.
“If they want to make collection of use tax easier, it’s not just Amazon. They need to find a way to have consumers get more compliant,” said Annette Nellen, a San Jose State University professor who has tracked such efforts.
