The American Civil Liberties Union told a federal judge today that North Carolina's effort to collect sales taxes from online retailers could violate shoppers' rights to free speech and privacy.
The ACLU intervened in Amazon.com's federal lawsuit against the N.C. Department of Revenue, in which the online retailer challenges the state's attempt to force the the company to turn over sales information so it can be assessed for taxation. The lawsuit is filed in Seattle, where Amazon is based.
The ACLU's suit is filed on behalf of Asheville Councilman Cecil Bothwell and six anonymous plaintiffs, most of them from the Triangle. Bothwell, an atheist and a publisher of controversial material, is joining the suit on behalf of himself and his readers.
The ACLU, a public interest group, is not taking a stand on the state's attempt to tax online retailers. However, the ACLU says the N.C. Department of Revenue's audit is collecting private customer information it doesn't need and shouldn't have.
The six anonymous people say the government shouldn't be using its authority to track the identities and shopping habits of private citizens. The ACLU is not revealing their genders and refers to all as Jane Doe.
One is an engineer in Raleigh who's a "recognized expert in information systems security." Another Raleigh plaintiff is the General Counsel for an intenational corporation. Another plaintiff from Raleigh is a writer for a software company. A plaintiff from Chapel Hill just finished her first year of law school at UNC Chapel Hill; she is joined in the suit by her parent, who lives in Florida.
According to the ACLU, the Raleigh engineer bought books on restraining orders after receiving death threats from an ex-spouse. Others bought books on atheism, politics and other controversial subjects.
The N.C. Department of Revenue is trying to collect a 7.75 percent sales tax from at least 350 online retailers that sell to North Carolina residents.
A conventional store collects the tax for the state by charging the customer. But in online transactions with out-of-state retailers, it's the customer's obligation to calculate and pay the tax, and most residents don't follow the law.
N.C. Revenue Secretary Kenneth Lay says businesses that don't pay sales and use taxes have an unfair advantage over businesses that do pay.