The North Carolina Department of Revenue, in a clear attempt to find NC residents and further tax them for online purchases, has recently demanded that the online megastore Amazon.com turn over information regarding over 50 million purchases made by NC residents between 2003 and 2010. Amazon.com, knowing the full ramifications of giving the NC the ability to retroactively tax its citizens, is refusing to turn over the information, and has filed a First Amendment lawsuit in federal court. The NC DoR, in turn, has threatened to sue as well, pending Amazon.com fails to turn over their records by April 19. Long story short? If Amazon.com wins, your privacy online is maintained, and you don’t have to pay state taxes on stuff you purchased in 2003. If the NC Department of Revenue wins, you’ll not only have all of your dirty laundry viewed by tax men, but you’ll probably be charged for it too.
These taxes are the kind that are ultimately destructive to consumer rights, tax law, and our freedom as a whole. The NC DoR already has an “Amazon Tax” in place — but it’s anything but fair. The Department of Revenue has absolutely no right to begin to search retroactively through buyer records online to start taxing its citizens further: that’s an unjust way to make a dollar, and it’s a quick way to make online retailers positively scared of North Carolina. Heck, even taxing people for online purchases in the first place is highly underhanded and questionable — it undermines commerce and fundamentally exploits companies that do not even exist in the state. Perhaps worst of all, retroactive taxes of online goods would set a precedent for NC taxes to extend to many things in your past — meaning those “tax free” purchases you made 5+ years ago may come back to bite you in a new and very irritating way.
The “Amazon Tax” concept is not entirely original. The taxing of online retail has been implemented in states like New York and Rhode Island for quite some time, and it has caused a great deal of controversy in these locations. In fact, according to the Tax Foundation, Rhode Island has actually lost money, because Amazon responded to their “Amazon Tax” by dropping available programs and thus halting a lot of commerce. In New York, the tax was upheld in a court, but legal battles continue to this day. Because of its size and power, Amazon.com is not afraid to punish a state for being too hasty with taxes — and they’re likely to punish North Carolina (and implicitly North Carolina citizens) if the Department of Revenue begins to retroactively tax online purchases.
Let’s just hope Amazon wins this little war. North Carolina citizens can’t afford to be taxed on stuff they purchased over 7 years ago.
