Online Sales Tax Revenue & State Governments (Amazon vs North Carolina)

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Amazon Wins Fight To Keep Customer Records Private



In a Victory for the Free Speech and Privacy Rights of Amazon.com customers, a federal judge ruled today that the company would not have to turn over detailed records on nearly 50 million purchases to North Carolina tax collectors.

The state had demanded sensitive information including names and addresses of North Carolina customers--and information about exactly what they had purchased between 2003 and 2010.

U.S. District Judge Marsha Pechman in Washington state said that request went too far and "runs afoul of the First Amendment." She granted Amazon summary judgment.

The Tar Heel State's tax collectors have "no legitimate need" for details about the literary, musical, and cinematic habits of so many Amazon customers, Pechman wrote. "In spite of this, [North Carolina] refuses to give up the detailed information about Amazon's customers' purchases, while at the same time requesting the identities of the customers and, arguably, detailed records of their purchases, including the expressive content."

Amazon has provided the state tax collectors with anonymized information about which items were shipped to which ZIP codes. But North Carolina threatened to sue if the retailer did not agree to divulge the names and addresses linked to each order--in other words, by providing personally identifiable information that could be used to collect additional use taxes that might be owed by state residents.

Pechman's opinion did leave open the possibility of North Carolina tax collectors deleting the data they currently have and firing off a narrower request to the online retailer: "Issuing the declaratory relief as phrased does not prohibit [N.C. tax collectors] from issuing a new request for information as to only the names and addresses of Amazon's customers and general product information, assuming that [the state] destroys any detailed information that it currently possesses."

Because Amazon has no offices or warehouses in North Carolina, it's not required to collect the customary 5.75 percent sales tax on shipments, although tax collectors have reminded residents that what's known as a use tax applies on anything "purchased or received" through the mail. The dispute arose out of what had otherwise been a routine sales and use tax audit of Amazon by North Carolina's tax agency.

As CNET previously reported, Amazon filed a lawsuit in April after negotiations with the state tax collectors broke down. Neither side could be reached for comment this evening.

In addition, the ACLU intervened in the lawsuit asking for an even broader injunction against the tax collectors. They wanted Amazon to be prohibited from disclosing customer purchases without a subpoena, which the court did not grant.

In general, as Amazon stressed in its lawsuit, purchases of books, DVDs, Blu-ray discs, and other media enjoy special privacy protections.

In a 2002 decision, the Colorado Supreme Court ruled that the First Amendment protects "an individual's fundamental right to purchase books anonymously, free from governmental interference." The justices tossed out a subpoena from police to the Tattered Cover Bookstore asking for information about what books a certain customer had purchased.

And in a 2007 case, federal prosecutors tried unsuccessfully to force Amazon to identify thousands of customers who bought books online, but abandoned the idea after a judge rebuked them. Judge Stephen Crocker in Wisconsin ruled that "the subpoena is troubling because it permits the government to peek into the reading habits of specific individuals without their prior knowledge or permission."

In addition, a federal law called the Video Privacy Protection Act makes it illegal for anyone selling movies to disclose customer information to anyone, including state tax collectors. The 1988 law specifically covers "prerecorded video cassette tapes," and also sweeps in "similar audio visual material" such as DVDs and Blu-ray discs.

North Carolina's legal setback comes as other states experiment with new ways to collect taxes from online retailers. California may require retailers to report the total dollar value of purchases made by each state resident. A decision is expected at any time in a related case that Amazon filed against New York state.

Update October 26 at 7:06 a.m. PT:

Last night I asked the North Carolina Department of Revenue what its plans were, including: "Will you destroy that information and issue a new request?" I just received a partial response via e-mail, which doesn't answer that particular question. All it says is: "Attorneys with our office are currently reviewing the ruling, and no decision has been made yet about whether or not the State will seek an appeal."

Update October 26 at 10:40 a.m. PT:

The ACLU sent over this response from staff attorney Aden Fine (it's also put the opinion online): "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, free from government intrusion, and undermine the very basis of American democracy and our cherished freedoms. With this ruling, the court emphatically reemphasized what other courts have found before - that government entities cannot watch over our shoulders to see what we are buying and reading."



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Sources: Amazon.com, CNBC, CNET, MSNBC, Google Maps

Cyber Monday Sales Top $1Billion! Sign Of Economic Recovery

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Manic Cyber Monday Top $1B In Sales



Cyber Monday started as a gimmick to get people to shop at their desks on the first workday after Thanksgiving. But if you promote something enough, it can take on a life of its own.

This year, stores swamped customers with online ads and e-mail deals, and sales could top $1 billion, making it bigger than any single shopping day last year.

Online sales were already running 15 percent ahead of last year's by 3 p.m. Monday, with the biggest shopping hours of the day still to come, according to IBM's Coremetrics tracking service.

"The numbers are really strong," said the service's chief strategy officer, John Squire, who added that he expects Cyber Monday to be the biggest online shopping day of the season.

The Monday after Thanksgiving was dubbed Cyber Monday by the National Retail Federation trade group in 2005 to describe the unofficial kickoff to the online shopping season. The idea was that people returning to work after the long weekend would shop at their desks.

It never really was the busiest online shopping day of the year.

But like any good marketing angle, it spawned imitation. Nearly 90 percent of U.S. retailers offered some kind of Cyber Monday promotion this year, targeting shoppers who didn't want to venture out at 4 a.m. for those in-store deals. In 2007, 72 percent offered a Cyber Monday promotion.

"Retailers are doing everything they can to build up and extend the event aspect of it — tweeting deals every hour, running Cyber Monday ads — like it's such a big thing you can't miss out on," said Stacy Landreth Grau, associate professor of marketing at Texas Christian University's Neeley School of Business.

Rachel Bergman, general manager of e-mail marketing service Experian CheetahMail, said this year the company sent out several hundred million Cyber Monday promotional e-mails, 40 percent more than last year — on behalf of clients like Borders, J. Jill and Bass Pro Shops.

It has rarely been the biggest online shopping day of the holiday season, however — last year it was No. 2 — and this year, online deals have been stretched by retailers throughout the weekend.

Historically the biggest online shopping day of the year comes sometime in mid-December, when shoppers face deadlines for ordering to ensure delivery by Christmas Eve. Last year, it was Dec. 15, according to online research firm ComScore.

But this year, shoppers seem to be in the mood to spend more. On Thanksgiving Day, usually quiet for online shopping, Americans spent $407 million online, 28 percent more than last year. They spent nearly $650 million online the following day, up 9 percent.

Last year, Cyber Monday sales totaled $887 million. This year, $1 billion wouldn't be a surprise, analysts say.

New Yorker Joseph Gallo waited until Cyber Monday to buy the Blu-ray "Back to the Future" trilogy, on sale for $34.99, and separately a pair of headphones slashed to $45.69 from $130 from Amazon.com.

"I get the feeling of deals being better having watched Amazon all last week and today," Gallo said.

Many shoppers don't actually buy at work. They compare prices from their desks, then buy when they get home, said Graham Jones, vice president of merchant accounts for deal aggregator Pricegrabber.com. Peak activity on that site is usually 7 or 8 p.m.

Retailers like Best Buy, Target and others have extended their online deals through much of the weekend and through the week, but they were offering specific deals on Monday.

Target offered a Kodak Waterproof mini video camera, regularly $99.99, for $49.99, and it will offer more deals Tuesday and throughout the week. Walmart.com, which is pushing the event as "Cyber Week," promoted bikes for $39 and a 6.5-quart Dutch oven for $33.

Some shoppers who bypassed discounts over the weekend were rewarded on Monday. At Landsend.com, a girl's jacket was on sale for $39.99 on Sunday, a third off the retail price of $59.50. By Monday morning, the price was $35, and an extra savings came by way of free shipping.

Christy McClung, a student and quality control worker in central Oregon, said she bought a TV at BestBuy.com after she was out of town and missed Black Friday sales.

While she didn't find exactly the TV she wanted, she bought one because it was a good value, she said. "With the free shipping, it was a great deal."

Cyber Monday's share of online holiday spending has grown slightly over the past five years, from 2.5 percent in 2005 to 3 percent last year. That's partly because of shifts in the calendar that make the holiday shopping season longer or shorter, but also because "as consumers become more attuned to deals and discounts, Cyber Monday has become a more important event," said Andrew Lipsman, an analyst for ComScore.

Online spending is still a relatively small piece of the holiday pie, between 8 and 10 percent of total holiday sales.


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Sources: CNBC, MSNBC, The Shoe Dish, Google Maps

Tiger Woods Merchandise & Memorabilia Prices Slashed

Are Tiger's endorsements in trouble?

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Tiger on Sale


As Tiger Wood's troubles mount—including an unidentified woman being transported from his home to a nearby hospital Tuesday morning—retailers are slashing their prices on the golfer's merchandise and disillusioned collectors are dumping their memorabilia.

The closest toy store to Tiger Woods' boyhood home is a Toys "R" Us in Huntington Beach, California. There’s a strong chance Earl and Kultida Woods shopped for Christmas presents here when then their son was young, and the store yesterday was girded again for the holiday rush, with Barbies and pottery kits stacked up front. For those on a budget, there was a clearance sale on action figures in the back: the NFL’s Jay Cutler in a Broncos uniform (he’s now a Bear), the NBA’s Ben Gordon as a Bull (he’s now a Piston)—and native son Woods. Regularly $15.99, the Woods action figure had been slashed to $9.98.

So it goes these days with greatest brand in sports, now that he’s been revealed to be a horn-dog of the highest order. At press time, his major sponsors were behind him. Nike has Tiger’s back. So, too, does Gillette. And it will be hard to tell if Tiger’s travails have any effect on sales of Accenture consulting gigs in the short term. But as it’s Christmas shopping season, the sales of Tiger videogames (through Electronic Arts), action figures (through Upper Deck), and memorabilia offer an immediate window into the scandal’s effect.

The news for Tiger is mostly bad, with a few hopeful rays peeking out. We sent reporters to stores around New York City, Southern California, and Washington State. The best results for Tiger, clearly, were the videogames. Among 10 stores visited, none noticed a dropoff the for super-profitable Tiger Woods games on either the Xbox or Wii platforms.

“It’s not like he killed anybody,” says one rep at a Toys "R" Us outside Seattle. “I sold one just the other day.” (“Our strong relationship with Tiger for more than a decade remains unchanged,” said Electronic Arts in a statement to The Daily Beast as bland as Tiger’s reputation used to be. “We respect Tiger's privacy, we wish him a fast recovery and we look forward to seeing him back on the golf course.”)

The figurines, however, were another story. It’s hard, after all, to envision Dad buying Junior a toy with moveable parts depicting the man with the loosest club in town. Much less an “action figure.” At the Times Square Toys "R" Us in Manhattan on Monday, dozens of forlorn Tiger Woods action figures, also marked down from $15.99 to $9.98, had just been relocated “a couple days ago” from their usual home on the second floor to the corner of the basement, where most items are on sale, according to an employee. He said he believed that the price had been reduced at that same time.

The Toys "R" Us outside Seattle had four different kinds of Tiger figurines, also discounted to $9.98, though the store manager insisted they had been on clearance before the scandal. When we asked a sales rep at a Target in Tukwila, Washington, if they carried Tiger Woods action figures, she said she’d never heard of the product, before pausing and asking a sincere question of her own: “Is that intended as a gag gift?”

We then checked the pulse of those normally excitable when it comes to Tiger collectibles. According to one authenticator of sports memorabilia, his clients are not optimistic. Joe Orlando, president of Professional Sports Authenticators, says that one of the most enthusiastic collectors of Tiger Woods cards has put his entire collection—valued at more than six figures—on the market, at come-as-you-will prices. The collector, who saw a moral, as well as an absolute, victory to Woods’ career—a middle-class African American triumphing in a country-club sport—threw in the towel after revelations of Woods’ extramarital affairs hit the wires. “It’s been very difficult for sports memorabilia and card dealers to move Tiger products,” says Orlando. “Many of them have told us they’re not even going to try until the dust settles.”

Where there’s pessimism, however, there are always value seekers. Mike Heffner, president of Lelands.com, a prominent sports memorabilia auction house, said he thinks that Woods’ sporting accomplishments will eventually overshadow his off-course travails, and that his “personal problems only make him more human and easier for a lot of us to relate to.”

The price of at least one piece of Woods memorabilia is skyrocketing: the wedge that Elin Nordegren used to break the back window of Tiger’s Cadillac Escalade. “If that came up for auction, I bet it could fetch close to $250,000,” says Heffner. If true, that makes it, by far, the most valuable golf club in the world. Jack Nicklaus, eat your heart out.



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Sources: The Daily Beast, MSNBC, Nike, Google Maps

"Cyber Monday" Sales Top 2008 By 20%...Winners & Losers

Key-stroked Christmas. On the biggest online shopping day of the year, CNBC's Jane Wells gets a glimpse inside an Amazon warehouse.

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"Cyber Monday" Winners and Losers. CNBC analysts discuss who will be the winners on "Cyber Monday" and this holiday season.

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"Cyber Monday" sales rise 20 percent over 2008


Retail Web sites kept amping up the deals Monday, the first day after Thanksgiving weekend's strong online sales, to try to maintain the momentum.

Meanwhile, a research firm that tracks business at stores reported tepid sales and customer traffic for Friday and Saturday that confirmed a so-so start to the season for the bricks-and-mortar world.

Though the Web is only about 10 percent of the holiday shopping pie, it's seen most of the growth so far this year — an encouraging sign after last year's first online sales decline.

Coremetrics, a Web analytics company in San Mateo, Calif., said that as of 1 p.m. Monday, sales for the day that the industry still pitches as "Cyber Monday" were up 19.6 percent over a year ago.

The bright spot offers hope after traditional retail sales came in just above flat for Black Friday, with shoppers packing stores but sticking to their lists, going for deep discounts and practical items.

Investors voted with their dollars, rewarding online sellers. Amazon.com shares rose $4.17, or 3.2 percent, to $135.91 on a day when stocks of most traditional retailers fell as Wall Street analyzed the sea of data and anecdotal reports from the weekend.

ShopperTrak, which is based in Chicago and tracks sales and traffic at more than 50,000 outlets, said late Monday that retail sales for Friday and Saturday edged up 0.9 percent to $16.77 billion, while customer traffic fell 2.7 percent compared with last year. According to ShopperTrak, U.S. traffic slipped 2.5 percent on Friday, compared with an 18 percent drop in the year-ago period. Traffic fell 3.2 percent Saturday, compared with a 17 percent drop a year ago.

ShopperTrak derives its data from crowd-counting sensors in stores, combined with data from the retailers themselves on spending and how it relates to customer traffic.

Practical items popular with shoppers

Deeply discounted electronics such as flat-screen TVs, game systems and netbooks were popular, but more practical items such as appliances and home decor were also big sellers, as consumers took advantage of sales to buy things for themselves.

Many shoppers started looking for online deals ahead of what the industry still pitches as "Cyber Monday," as retailers stretched their online deals over several days.

Target, Walmart, Amazon.com and other retailers started offering the online equivalent of Black Friday specials on Thanksgiving or even earlier.

They stepped it up Monday. Amazon.com was discounting the Apple iPod Touch 8GB for $158, $20 less than Sunday and $40 off the retail price of about $200. Target.com offered a deal Monday for a Garmin GPS system for $186.99, down from $249.99. Free shipping was also prevalent.


New Thanksgiving tradition: Shopping?

Marshall Cohen, chief industry analyst at market research firm NPD Group, said this year saw the "graying of Black Friday," because deals that typically occurred only on the Friday after Thanksgiving have been spread out over two weeks.

"The holiday spread itself out," he said. "On Thanksgiving Day, there's a new tradition, shopping online before you stuff the turkey, putting the turkey in oven and going out shopping."

The Monday after Thanksgiving is usually far from the busiest online shopping day of the year, but it is typically one of the 10 busiest. It was dubbed "Cyber Monday" by the National Retail Federation trade group in 2005 to describe the Monday after the Thanksgiving holiday.

The thinking was that shoppers who lacked broadband Internet access at home would wait until returning to work to look online. Now that most homes have broadband, that rationale has faded.


Finding a once-in-a-lifetime deal

Analysts expect Dec. 14, the last day consumers can order goods and have them arrive before Christmas, will be the busiest online shopping day.

Keith Harris, 36, an IT consultant for Hewlett-Packard, went out Friday for in-store sales, but he waited until Monday to buy a Playstation 3 because Walmart.com offered it at the best price on Monday — in a bundle with two games and a movie, for $369.

"You're looking for that once-in-a-lifetime deal," he said.

Forrester Research analyst Sucharita Mulpuru predicts online holiday sales will rise 8 percent to $44.7 billion. So far, the weekend results are "strong reinforcement of how Web sales continue to outpace store sales," she said. Online sales account for about 7 percent of retailers' total sales, though that increases to about 10 percent during the holidays.

Scott Savitz, CEO of Shoebuy.com, one of the largest online shoe retailers, reported that traffic has been robust since Thanksgiving. He expects that Black Friday, not the Monday after Thanksgiving as it had in past years, will mark the first big surge in sales and traffic for his site.

"There is definitely a behavioral shift," said Savitz. "Clearly, people are seeing that Black Friday will be the start of the holiday season, no matter whether you are online or offline."


Sources: MSNBC, CNBC, Amazon.com

Black Friday Wedding: Couple Marries While Waiting In Best Buy Sales Lines

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Sources: MSNBC, Best Buy, Google Maps

Recession Continues To Hurt Small Businesses...How Can We Save Them?

MSNBC----


(TODAY Show's Mike Leonard travels to a country store in Vermont that carries some unique products.)

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Chris Fine has been selling remote-controlled cars, boats and other hobby items for 27 years.

These days, he’s hoping he’ll be able to hang on another few months.

“I hope I make it to December because I’m going to do everything in my power,” Fine said on a recent day in which he had sold a paltry $26 in items by midday. “I’ve got to figure out a way to survive.”

As the recession has gripped the nation over the past year and a half, Fine said monthly sales at his store, Mid-Hudson Hobbies in Middletown, N.Y., and online business, Fine Design, have tumbled by more than 50 percent.

Perhaps most disturbing, Fine said entire swaths of business — such as his customer base in hard-hit Michigan — have fallen away completely amid rising unemployment rates there and elsewhere.

For many, he suspects, it’s an easy choice between buying a new hobby item and paying the utility or food bill.

“This is disposable income,” he said. “If people have any extra income, they come in.”

Although the recession has been a struggle for all U.S. retailers, there is evidence that it has been especially difficult for the nation’s smaller, independent retailers. With Americans cutting back drastically on their spending, some stores have lost business as shoppers have turned to cheaper discount chains, while others have found that their customers have simply gone without the kind of discretionary items some small retailers sell.

Sales at privately held retailers fell 3.63 percent on average for the first seven months of this year, as compared to an average drop of 1.34 percent for publicly held companies in the same period, according to Sageworks Inc., which provides financial data on privately held companies. The data is based on financial records from thousands of accountants.

The focus on penny pinching is especially hard for small retailers that deal in widely available items, like books or music, and may find it difficult to match the prices at big chain or online discounters.

“Those are the ones that have had the biggest challenge and have really had to find ways to add value to their service,” said Jeff Milchen, co-founder of the American Independent Business Alliance, which helps community businesses band together to promote their businesses.

In addition to the drop in business, experts say small businesses may be having a tougher time in part because they don’t necessarily have the cash reserves to make it through a deep trough. The credit crunch has exacerbated that problem, leaving some small retailers unable to obtain credit to either ride out the storm or keep the inventory they need to stay in business.

“Independent businesses obviously are smaller and don’t have the financial wherewithal to survive a sustained downturn maybe in the same way that their bigger counterparts do, and so that’s obviously a concern,” said Stacy Mitchell, a senior researcher with the Institute for Self-Reliance, which promotes local community development.

Faced with few other options, many small business owners may also find that they have to rely on their personal savings or credit cards to stay afloat, meaning that any businesses troubles can quickly translate into personal financial problems as well.

Burning through savings

To keep his hobby business going even as sales have plummeted, Fine and his only remaining employee – his brother – have stopped taking paychecks, and he’s burned through much of his savings. Nevertheless, he said he’s behind on his home mortgage and worried about whether he’ll be able to pay next month’s rent on his store.

Meanwhile, he’s watching many of his competitors go out of business, along with several other local businesses in the downtown area where he’s located.

He said he’s also facing stiffer competition from his suppliers, some of whom have dropped prices on their own mail-order retail business in order to attract more customers.

On a recent night, Fine said he was up until 5:30 a.m. tinkering with his Web site and racking his brain for other ways to pump up his business. It’s a position he never dreamed he’d find himself in.

“It’s very frustrating to be at this point in my life, at 50 years old, to have to worry about this,” he said.

Perhaps the worst part of Nishan Shepard’s day is the drive home.

“I go home every day and see a new store boarded up,” said Shepard, who has run Rockridge Kids in Oakland, Calif., for the past 17 years.

As he’s watched so many of the other local businesses in this once-vibrant shopping district succumb to the recession, Shepard said he’s also struggled to accept that his business has had to change substantially.

Customers that once regularly splurged on high-priced toys are now shopping for cheaper items, or not at all. Last holiday season, he said, “We didn’t sell a product that was $79.99 and up.”

To cope with the recession, Shepard said the store, which sells toys, strollers, furniture and other items, has started agreeing to discount an item when a customer requests it, something he’d never previously done in 17 years business.

Meanwhile, he’s also increasingly overhearing one customer offer to sell another customer their used strollers or other items, effectively taking a sale away from him right in his own store.

To avoid drastic measures such as cutting his staff of nearly 20, Shepard said he’s rooted around for ways to save money on things like phone bills and warehouse space. He said that’s allowed him to keep his competitive advantage: expert advice and customer service.

Meanwhile, Shepard himself is dealing with a drop in income as well as a substantial hit to his retirement savings, meaning he’s had to cut back on spending himself.

“It does bother me to some degree, but it also makes me understand when my customers come in and don’t spend as much as they might have two years ago, or are looking for bargains,” he said.

Pockets of Hope

Despite the difficult times, Milchen, of the American Independent Business Alliance, said he is heartened to see that many businesses have fought aggressively to keep customers coming in. In the past year and a half, he said, there’s been much more interest in small businesses banding together to form community alliances for marketing and other purposes.

He’s also seeing more consumer interest in community-supported agriculture, in which locals buy produce directly from area farms. As people think more carefully about what they spend money on, he thinks some are also giving more consideration to where their dollars are going.

“There are clearly people who have shifted their spending to Wal-Mart, and I think there’s another group of people who have responded to the recession by making an extra effort to support businesses that are owned by their neighbors,” said Mitchell, of the Institute for Self-Reliance.

After months of fretting, Shepard said he and some other local business owners recently realized that they simply have to get comfortable with the idea that business will not be like it once was.

Shepard also realized that he had been spending so much time worrying about the business that he’d stopped taking time to enjoy his work. He likens it to the period after the Sept. 11 terrorist attacks, when many stores opted to close their doors.

“We decided to stay open, first of all because I’m stubborn (but also because) I just wanted to hear those kids come in, laughing and playing at the train table. I knew it would make me feel better,” he said.

These days, he said, “I’ve started listening to the kids again. … That’s what keeps me going.”


Sources: MSNBC