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Tax Law

First Amendment Violation. Really?

The federal judge's ruling on October 25 that the North Carolina Department of Revenue cannot force to disclose customer information on the grounds that the state's request violates the First Amendment is incredible. For the uninformed, North Carolina asked Amazon for a list of its customers in North Carolina -- who collectively made over 50 million purchases over the last seven years. You see, folks who buy from Amazon and other Internet retailers don't pay use tax on their purchases. That costs law abiding citizens in North Carolina and other states billions in lost tax revenue. You pay more tax because people who shop online don't.

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You can believe that Amazon really cares about the First Amendment. But you would be wrong. Amazon is a corporation. And corporations are legal structures that do not "care" about anything. Corporate officers, directors, and executives have one goal -- making money for their shareholders. No matter how much they spend on public relations, corporations don't really care about global warming, slave labor, clear-cutting the Amazon rain forest, or any of the rights guaranteed under the U.S. Constitution.

What Amazon cares about is keeping the advantage of selling products essentially tax free. If the North Carolinians paid use tax because the state reminded them of their legal obligation to do so, they might not buy as much stuff over the Internet. It is easy to understand why the executives at Amazon suddenly care so much about the First Amendment rights of the good people of North Carolina.

Actually, Amazon could protect the First Amendment rights of citizens by collecting and remitting the sales tax to the state. No names need be disclosed at all. But interestingly, Amazon doesn't seem to care about the First Amendment quite that much.

OK, so Amazon is perpetrating this constitutional nonsense because it really is trying to protect its market. But why is the ACLU shilling on Amazon's behalf? The ACLU really does care about the First Amendment. But will disclosing the names of people who purchase goods over the Internet conflict with the rights of free speech or free expression?

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"This ruling is a victory for privacy and free speech on the Internet," said Aden Fine, staff attorney with the ACLU's Speech, Privacy and Technology Project, in an October 26 statement. "Disclosing the purchase records of Internet users to the government would violate their constitutional rights to read and purchase the lawful materials of their choice." The ACLU statement neglected to say that they are also protecting those who willfully evade tax.

View TaxAnalysts' David Brunori's opinion in its entirety on


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