This morning I heard a story about a large corporation and a judiciary both acting in favor of privacy over taxes. It warmed my cockles.
As the recession continues states look for ways to fix budget shortfalls. Raising or enacting taxes is politically incendiary in an election year but one state saw a way to increase revenue. Last year North Carolina asked Amazon for information about goods it shipped (complete with names & addresses) to residents between 2003 and 2010. It intended to collect sales tax owed by the good people of NC.
Even though Amazon does not charge sales tax on purchases the buyer may be responsible for paying come April 15th. North Carolina asked for records revealing identities and purchases as part of a tax audit of the online retailer. Amazon replied with detailed information regarding the items purchased, dates, amount of purchases, and county to which the items were shipped, but no personally identifying information. The state acknowledged the information is sufficient to assess sales taxes, but pressed for all the requested details.
With the aid of the ACLU Amazon fought back citing the First Amendment, specifically the Video Privacy Protection Act which bars “wrongful disclosure of video tape rental or sale records.” Since passage in 1988 the protection was extended to cover DVDs, video games and books. The federal district court in Seattle, Washington ruled in favor of Amazon.
Withholding the information was financially disadvantageous to the company because Amazon could not claim potential deductions, resulting in a higher tax bill. They did the right thing in the face of monetary loss.
The cynic in me sees Amazon putting up a great public relations campaign in favor of privacy, all the while selling our personal information in secret to other companies. Other states, including my home state of Texas, are pursuing uncollected tax revenue from Amazon and making a strong showing against the Tar Heel State may bolster their other cases.
Overall it is a win for privacy and I’ll take it.