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Federal Judge Sides With Amazon in Privacy/Tax Issue

26 Oct, 2010 By: Erik Gruenwedel

A federal judge in the state of Washington has ruled that Amazon does not have to turn over to the state of North Carolina consumer data from 2003 through 2010.

The decision late Oct. 26 by U.S. District Court Judge Marsha Pechman in Seattle found that the state’s request for the online retail giant’s user information violated their rights to privacy, free speech and anonymity.

Though hailed by civil libertarians, the decision marks a major tax victory for Amazon, which has come under scrutiny by states seeking sales tax revenue to buttress recession-addled budgets.

Amazon originally filed a lawsuit against the North Carolina Department of Revenue (NCDOR) in an effort to stop the state from collecting consumer information, which it considered the first step in collecting sales taxes.

With no physical location in North Carolina, Amazon contends it is not responsible for collecting or paying state sales taxes.

Initially Amazon had agreed to turn over exact purchase items, including names of books, movie and music discs without names of individual consumers. NCDOR refused to agree that it was not entitled to the information, which led to the suit.

Amazon reportedly sold nearly 50 million consumer goods in the state during the period.

The American Civil Liberties Union, ACLU of North Carolina Legal Foundation and ACLU of Washington intervened in the suit on behalf of Amazon customers whose information was deemed at stake.

“The fear of government tracking and censoring one’s reading, listening, and viewing choices chills the exercise of First Amendment rights,” Pechman wrote in her decision.

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