Back in April I reported on Amazon.com’s petition for declaratory relief from North Carolina; the North Carolina Department of Revenue requested information on every purchase of goods since 2005 in the Tar Heel State. And that request was rather inclusive:
By letter hand delivered on March 19, 2010, to Amazon in Seattle, Washington (the “March Information Request”), the DOR stated that Amazon’s initial response to Question 16 of the December Information Request omitted the “Bill to Name; Bill to Address (Street, City, State, and Zip); Ship to Name; Ship to Address (Street); Product/item code or description” (the “Customer Data”). The DOR demanded that Amazon provide this information “for examination” on or before April 19, 2010.
Well, the District Court has made its ruling in Amazon.com v. Lay
The DOR concedes that it has no legitimate need or use for having details as to North Carolina Amazon customers’ literary, music, and film purchases. In spite of this, the DOR 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 no compelling need for both sets of information, the DOR’s request runs afoul of the First Amendment. It bears noting, too, that the DOR’s requests for information were made solely in the context of calculating Amazon’s potential tax liability. Amazon has provided all of the data necessary to determine its tax liability, except any potential tax exemptions. The DOR has failed to articulate the compelling need to calculate these possible exemptions, particularly where it has admitted that it can and will assess Amazon at the highest rate and it would permit Amazon to “challenge the assessment and … establish that exemptions or lower tax rates applied to some products.” Even assuming there is a compelling need to calculate Amazon’s tax liability inclusive of exemptions, the DOR’s requests are not the least restrictive means to obtain the information. The request is overbroad. The Court GRANTS the motion for summary judgment.
So on First Amendment grounds Amazon wins this battle. Amazon also wins based on the Video Privacy Protection Act (the NC DOR’s request would cause Amazon to violate that act).
Note, though, that the court specifically noted that Amazon must comply with valid tax rulings. Of course, whether Amazon must collect North Carolina tax will continue to be fought….