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Regulation

Tax Reporting Laws Raise Privacy Claim Risks for Online Companies

States are scrambling to shore up sales tax revenues that are eroding because of e-commerce sales. A new approach to sales tax collections involves information reports on customers' online purchases. This approach may create potential legal claims against many online companies for giving too much information about customers to state tax agencies or even to the customers themselves.

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States are scrambling to shore up sales tax revenues that are eroding because of e-commerce sales. A new approach to sales tax collections involves information reports on customers’ online purchases. This approach may create potential legal claims against many online companies for giving too much information about customers to state tax agencies or even to the customers themselves. Companies potentially affected include any e-commerce business selling goods or taxable services, companies that sell digital products through electronic download or streaming service, cloud computing companies, and brick and mortar retailers that do not have stores in the state but deliver products there.

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