UPDATE: Amazon sues N.C. for demanding customer info
Update at 9 p.m. EST with comments by North Carolina's secretary of the Department of Revenue, disputing Amazon's claims that it sought information on book titles.
Amazon.com filed a suit against North Carolina tax authorities who have asked for the names of customers in the state and the books they have bought from the online retailer since 2003. The state, however, disputed the allegations, saying it never specifically requested for book titles in its audit of the online retailer.
The request, made in January, was part of an audit for taxes by the North Carolina Department of Revenue. But the Seattle-based e-bookseller protested in a lawsuit filed on Monday that the state authority overstepped its legal jurisdiction by demanding private data and violated First Amendment rights. Such demands could hurt future sales because customers would fear their personal data would be made available to state authorities, the company said.
The suit was filed in the U.S. District Court of the Western District of Washington in Seattle.
“Notwithstanding the information that Amazon has already provided, [the state] now threatens Amazon with an administrative summons and summary contempt proceeding if Amazon does not turn over the name and address of each customer who purchased or received any of the millions of books, movies, music CDs or other products that Amazon sold to North Carolina customers,” the company said in its complaint.
North Carolina requires residents to pay taxes on online purchases if buying the same item in a store would result in a sales tax. But out-of-state retailers can’t be forced to collect North Carolina’s tax if they have no physical presence in the state.
"We never asked for titles," Kenneth Lay, secretary for the state's Department of Revenue said in an interview. "That is a misunderstanding."
He said he will have the state's attorneys speak with Amazon's attorney to try to straighten out the confusion.
Amazon said it has sold 50 million products to North Carolina residents since 2003. The state’s request, according to the suit, could lead to the disclosure of sensitive information. So if a resident bought a book about, for example, how to get pregnant or deal with cancer, the customer’s name and address would be tied to such purchases and handed over to the tax authority.
Associated Press contribute to this post.
April 20, 2010; 2:49 PM ET
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