Lawsuit challenges state's demand for reporting of online transactions

By Bob Unruh
© 2010 WorldNetDaily

Want to buy a “long live the tea party” bumper sticker online? Soon, the state government in Colorado could know that you purchased it, what you paid for it, where it was shipped, what billing address you used, and a few other details.

A plan requiring that consumers’ online purchases be tracked, compiled into lists and reported annually has been launched in the state, and now a lawsuit is challenging the constitutionality of the Big Brother look into credit-card records.

The Direct Marketing Association’s lawsuit is over the state’s law that now gives “out-of-state retailers” the option of demanding consumers pay to them the Colorado sales tax or complying with the information compilation and reporting requirements.

“The Department’s tax-policy director has stated publicly that he believes most affected retailers would choose to collectColorado sales tax to avoid the more unpleasant option of having to send tax notices to their customers,” the lawsuit alleges.

But there are threats to companies because of requirements that they keep consumers’ information private.

“The department was cited in a May 2008 report of the state auditor for its failure to take appropriate measures to protect the confidentiality of personally identifiable information that it maintains in its databases,” the complaint alleges.

The case in federal district court in Colorado challenges the state’s action as “an unprecedented invasion of consumer privacy” and alleges it “unfairly discriminates against interstate commerce, as the law is targeted solely at out-of-state retailers.”

“The new law and the regulations implementing it are an unconstitutional and blatant violation of Colorado consumers’ privacy,” said Jerry Cerasale, senior vice president for government affairs for the association.

“The law may have been passed in the hope of balancing the state budget through increased use-tax reporting by Coloradoresidents, but it has serious adverse consequences for consumers and businesses,” he said.

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