Amazon fights N.C. request for its data on customers

RALEIGH, N.C. — Online retailer Amazon.com Inc. said it is taking a stand for free speech by fighting a request from North Carolina tax authorities for information on people who bought about 50 million items since 2003.

Amazon said disclosing the names and addresses of buyers, as requested, would harm customers who may have bought controversial books or movies. In a federal lawsuit filed in Seattle, the company also expressed worries that the disclosures would diminish future sales.

North Carolina Revenue Secretary Kenneth Lay said his auditors don't care what Amazon customers read or view.

"We're not asking what they bought," he said in an interview. "We're asking how much they paid. We're not asking for specific titles."

At stake is potentially millions of dollars in taxes that North Carolina contends Amazon was responsible for collecting for years before state law was changed last summer.

Amazon wants the court to rule that North Carolina's collection effort violates the company's rights to sell and its customers' rights to buy books and other items "free from government intrusion into the customers' reading, viewing and listening choices."

Amazon is asking the U.S. District Court in Seattle, where Amazon has its headquarters, to find North Carolina's request unconstitutional. The company said federal action would avoid varied decisions in multiple courts "in the event other states make similar demands for customer data." The lawsuit was filed Monday.

Lay said North Carolina tax collectors regularly ask corporations for information to help officials check whether customers are paying the taxes they owe.

"We're not doing anything here that we don't do with everybody else," he said.

North Carolina requires residents to pay taxes on online purchases if buying the same item in a physical store would result in a sales tax. But out-of-state retailers can't be forced to collect North Carolina's tax if it has no physical presence in the state.

The dispute is over the state's definition of whether the company had a North Carolina presence.

Last summer, state legislators passed a law making Amazon responsible for collecting sales taxes because it had a network of local affiliates — North Carolina residents who linked to products on their blogs, promote Web shopping deals and offer coupons.