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Louisiana Makes It Illegal To Use Cash To Buy Used Goods

Louisiana businesses are suddenly discovering a new law that flew under the radar during the last legislative session:

Cold hard cash. It’s good everywhere you go, right? You can use it to pay for anything.

But that’s not the case here in Louisiana now. It’s a law that was passed during this year’s busy legislative session.

House bill 195 basically says those who buy and sell second hand goods cannot use cash to make those transactions, and it flew so far under the radar most businesses don’t even know about it.

“We’re gonna lose a lot of business,” says Danny Guidry, who owns the Pioneer Trading Post in Lafayette. He deals in buying and selling unique second hand items.

“We don’t want this cash transaction to be taken away from us. It’s an everyday transaction,” Guidry explains.

Guidry says, “I think everyone in this business once they find out about it. They’re will definitely be a lot of uproar.”

The law states those who buy or sell second hand goods are prohibited from using cash. State representative Rickey Hardy co-authored the bill.

Hardy says, “they give a check or a cashiers money order, or electronic one of those three mechanisms is used.”

Hardy says the bill is targeted at criminals who steal anything from copper to televisions, and sell them for a quick buck. Having a paper trail will make it easier for law enforcement.

“It’s a mechanism to be used so the police department has something to go on and have a lead,” explains Hardy.

Guidry feels his store shouldn’t have to change it’s ways of doing business, because he may possibly buy or sell stolen goods. Something he says has happened once in his eight years.

“We are being targeted for something we shouldn’t be.”

Besides non-profit resellers like Goodwill, and garage sales, the language of the bill encompasses stores like the Pioneer Trading Post and flea markets.

Lawyer Thad Ackel Jr. feels the passage of this bill begins a slippery slope for economic freedom in the state.

“The government is placing a significant restriction on individuals transacting in their own private property,” says Ackel.

To say the least.

As Thad Ackel, who is quoted in the linked report, notes, this law goes far beyond even the extraordinary step of banning cash transactions:.

The law goes further to require secondhand dealers to turn over a valuable business asset, namely, their business’ proprietary client information. For every transaction a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered. They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports. If a seller cannot or refuses to produce to the secondhand dealer any of the required forms of identification, the secondhand dealer is prohibited from completing the transaction.

This legislation amounts to a public taking of private property without compensation. Regardless of whether or not the transaction information is connected with, or law enforcement is investigating a crime, individuals and businesses are forced to report routine business activity to the police. Can law enforcement not accomplish its goal of identifying potential thieves and locating stolen items in a far less intrusive manner? And of course, there are already laws that prohibit stealing, buying or selling stolen goods, laws that require businesses to account for transactions and laws that penalize individuals and businesses that transact in stolen property. Why does the Louisiana State Legislature need to enact more laws infringing on personal privacy, liberties and freedom?

The standard justification for a law such as this is easy to understand. Second hand stores and pawnbrokers if only because both have long been a source for people in possession of stolen good to fence their ill-gotten wares. However, the law itself actually exempts pawnbrokers from the no-cash part of the law even though it’s fairly clearly that pawn shops are notorious as the destination for stolen goods. If the law was really aimed at preventing stolen goods from being sold in this manner, why ban pawnbrokers? Even if you accepted the justifications on their face, though, his law goes way too far, especially in the banning of cash transactions. The purpose of the bill could be met simply be requiring some form of Identification be taken when a transaction is made, and that records of the same be maintained. Banning the use of legal tender completely is way over the top.

Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction.  I would think that there’s a case to be made here that Louisiana has violated the Supremacy Clause of the Constitutional by saying that U.S. currency cannot be used for a certain class of transactions. Certainly, if this is allowed to stand, then the effect would be that any state could say that cash cannot be used for any number of transaction in the name of “fighting crime,” “public safety,” or whatever other excuse an inventive legislator can come up with.

It’s easy to understand why Louisiana would want to ban cash transactions. Absent some other form of record keeping, cash brings a kind of anonymity that paying with credit cards, debit cards, or checks cannot offer. If I’ve got a hundred bucks in my wallet, I can spend it anywhere I want without any concern that someone, somewhere is tracking me. You can’t say the same thing with any other form of payment. There’s something to be said for the ability to conduct your business without worrying about whether or not what you buy and where you buy is being monitored, either by a private entity or the government. In Louisiana, though, you can’t do that anymore, at least not if you want to buy used goods.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Vast Variety says:

    So this basically shuts down every Antique mall, pawn shop, junk yard, etc, etc, in the state…

    Talk about unintended consequences.

    Like or Dislike: Thumb up 13 Thumb down 0

  2. James Joyner says:

    You raise the most salient point: States simply have no right to declare that US currency is not legal tender. Period.

    Highly-rated. Helpful or Unhelpful: Thumb up 43 Thumb down 0

  3. Franklin says:

    Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction.

    My first thought as well, but I’m not a lawyer.

    This is actually a pretty big step towards a police state.

    Highly-rated. Helpful or Unhelpful: Thumb up 21 Thumb down 1

  4. ponce says:

    However, the law itself actually exempts pawnbrokers from the no-cash part of the law even though it’s fairly clearly that pawn shops are notorious as the destination for stolen goods

    Haha, that sentence is a perfect example of how corrupt politics works.

    The politicians probably sponsored this law just to shake down pawnbrokers.

    Like or Dislike: Thumb up 6 Thumb down 2

  5. PD Shaw says:

    I assume the issue is the metal scavengers. Outside the beltway, people are pulling metal out of old buildings and removing manhole covers and taking them to the metal recyclers. In the process, they are starting fires, getting electrocuted, and releasing hazardous chemicals. I believe in Indiana or Indianapolis, recyclers are now required to videotape the transactions or take pictures.

    Like or Dislike: Thumb up 0 Thumb down 1

  6. BluePenguin says:

    Bipartisan support and signed by a Republican Governor. Wow. Not what I would expect.

    Like or Dislike: Thumb up 8 Thumb down 0

  7. Hey Norm says:

    Hookers are in trouble. Wait…is that used goods…or a service?

    Highly-rated. Helpful or Unhelpful: Thumb up 20 Thumb down 0

  8. EddieInCA says:

    Here in California, thieves are stealing copper wiring and piping from buildings, along with ANYTHING made of metal that is accessible.

    I think asking for driver’s licences and/or another form of ID for these types of transactions might not be a bad idea, but you can’t make US Notes illegal. That seems like a clear constitutional violation.

    Like or Dislike: Thumb up 8 Thumb down 2

  9. Rick Almeida says:

    The Volokh Conspiracy has the beginnings of a legal discussion w/ some interesting comments.

    Like or Dislike: Thumb up 0 Thumb down 0

  10. PD Shaw says:

    @Rick Almeida: That excerpt of the law upheld sounds similar to the law where I live. Recyclers have to pay for scrap in check for anything more than $100.

    Like or Dislike: Thumb up 1 Thumb down 0

  11. Russell says:

    Well if that isn’t a small business killing regulation I don’t know what is.

    Like or Dislike: Thumb up 13 Thumb down 0

  12. Tsar Nicholas says:

    Definitely a faux pas by the legislature and by Gov. Jindal. Apparently they forgot that the road to hell is paved with the very best of intentions.

    I don’t think this law will survive too long. The dormant commerce clause alone provides a good reason to abrogate it. Probably there are other legal maladies with it too. The federal courts in Louisiana and especially the 5th Circuit U.S. Court of Appeals are quite amenable to striking down anti-commerce laws.

    Like or Dislike: Thumb up 5 Thumb down 0

  13. Catfish says:

    I knew it would finally happen – Confederate money makes a comeback! I’m rich, I’m rich!

    “0ld times there are not forgotten”

    Like or Dislike: Thumb up 6 Thumb down 0

  14. John Burgess says:

    The version of the bill I read–it may have been only a draft–specifically exempted charitable organizations like Good Will. I imagine it’s because Good Will is not the place to go when you’re trying to get rid of a thousand pounds of copper wiring or tubing.

    Still, better record keeping on the part of the purchaser would accomplish the same end as this bill, without the constitutional issues.

    Like or Dislike: Thumb up 1 Thumb down 0

  15. casimir says:

    it’ll never hold up in court.

    Like or Dislike: Thumb up 2 Thumb down 0

  16. michael reynolds says:

    Do Southerners just sit around all day thinking of stupid laws to pass?

    Like or Dislike: Thumb up 11 Thumb down 8

  17. PD Shaw says:

    @michael reynolds: California is the only state that has actually been issuing currency.

    Like or Dislike: Thumb up 0 Thumb down 0

  18. @michael reynolds:

    Do Southerners just sit around all day thinking of stupid laws to pass?

    Thinking up stupid laws is a nationwide past time. I know I can think of a number in my state (Pennsylvania) and your state (California).

    Like or Dislike: Thumb up 8 Thumb down 0

  19. Herb says:

    Once again, I’m relieved I live in a fairly reasonable part of the country…..

    Like or Dislike: Thumb up 2 Thumb down 0

  20. Catfish says:

    @Stormy Dragon: Stupid laws in CA: law banning Happy Meals (San Fran.), the horrible gas tax, the crazy law requiring schools to teach the “gay history”, laws restricting “trans fats” in restaurants.

    Like or Dislike: Thumb up 6 Thumb down 2

  21. There are no good intentions here. This is solely to set up monitoring on all transactions, and to ensure that people are chilled from buying used goods in favour of new ones. This is a direct attack on personal privacy, with the added benefit that it takes out the first sale doctrine as well.

    Like or Dislike: Thumb up 7 Thumb down 0

  22. michael reynolds says:

    Okay, fair enough, everyone, I surrender: I’m living in a great big glass house called California.

    Like or Dislike: Thumb up 7 Thumb down 1

  23. Ben Wolf says:

    Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction.

    This is, in fact the core of what it means to be a Sovereign State and autonomous issuer of currency. Louisiana went way beyond unconstitutional with this one; while I don’t doubt that no one involved was thinking in such grandiose terms, this is effectively an attack on the foundation of our economy. No way it stands.

    Like or Dislike: Thumb up 3 Thumb down 0

  24. James in LA says:

    @michael reynolds: Glass, schmlass. The demise of CA has been long predicted but stubbornly refuses to arrive. California isn’t going anywhere. There is so much entrenched wealth out here it’s just plain ridiculous. As has been stated many times in many ways the endless husband/wife bickering over money shifts in our favor when we restore sanity to the tax code, and quit trying to maintain and build what we have on a fraction of the needed investments.

    The hot desert sun that is hot even in January certainly isn’t going anywhere. Neither is Los Angeles. No one quake can now take it out. You’d need a swarm.

    So let ’em toss all the rocks they want. It’s a huge state and they will quickly get lost in all the other rocks of our mostly desert.

    Like or Dislike: Thumb up 0 Thumb down 0

  25. michael reynolds says:

    @James in LA:

    You’re preaching to the choir. I’m looking out at the lights of San Francisco, yesterday was up in wine country, a few months ago was living in the OC, and now closing in hopefully on some Hollywood action and let me make this crystal clear: No other state is half as cool as California. And I’ve lived 11 other states and the DC, and visited every state except North Dakota.

    But we do occasionally pass some bullsh-t laws.

    Like or Dislike: Thumb up 3 Thumb down 3

  26. jd says:

    Pawnshops are exempted because they already are required by law to record details of the transactions. The elimination of cash, however, doesn’t pass the smell test. Every $10 payment converted from cash to credit card is 25 cents in some major bank’s till. I wonder how much passed hands for this windfall.

    Like or Dislike: Thumb up 5 Thumb down 0

  27. profcouch says:

    THIS IS INSANE,ILLEGAL,,ASSINE,AND UNCONSTITUTIONAL.
    WHAT A STUPID , TYPICAL BIG BROTHER GOVT LAW.
    I HAVE ONE WORD;
    SCRIPT

    IT WORKED BEFORE
    IT WILL WORK AGAIN

    IT JUST SHOWS HOW OUT OF TOUCH THE OLIGARCHY OF EVIL ELITISTS
    THAT REPRESENT THE CORPORATE AND BANKING INTERESTS AND PRETEND TO BE THE GOVERMENT , REALLY ARE

    WHAT A BUNCH OF FAT CAT, HEAD IN THE SAND , PATHETIC LIARS.

    YOU WILL BE HELD ACCOUNTABLE.

    HOPEFULLY GIVEN A TRIAL OF YOUR PEERS AND THEN
    JUSTICE WILL BE SERVED.

    Like or Dislike: Thumb up 1 Thumb down 0

  28. profcouch says:

    @PD Shaw:
    WHAT A CROCK OF SHT!
    HOW ABOUT THE POLICE DOING THIER JOB?
    AND WHY ARE PEOPLE FORCED TO STEAL METAL?
    BECAUSE THEY ARE POOR AND THE RICH ELITE ARE JUST
    TURNING THE SCREWS TIGHTER.
    ITS THE SAMNE DAMN LOGIC THAT
    FUELS THE PHONEY ‘WAR ON…….TERROR/DRUGS/ETC”
    ITS ALL AN ATTACK ON THE WORKING CLASSES

    THIS IS JUST A BIG LIE AND A POWER GRAB BY THE GOVT+ BANKERS

    Like or Dislike: Thumb up 4 Thumb down 0

  29. profcouch says:

    @Russell:

    SCRIPT

    MAKE OUR OWN MONEY

    Like or Dislike: Thumb up 2 Thumb down 0

  30. michael reynolds says:

    YEAH!

    Like or Dislike: Thumb up 3 Thumb down 0

  31. Ron Beasley says:

    I use my debit card to get cash out of the ATM at $200 dollars at a time and pay cash for everything. I don’t have anything to hide except for the fact a may buy too much wine. I simply object to the fact that when I use my debit card someone is keeping track of what I buy. Perhaps that makes me a progressive libertarian. There are times I have to use a credit card – I use AMEX which I have to pay off every month and I don’t use it unless there is no alternative.

    Like or Dislike: Thumb up 3 Thumb down 0

  32. For anyone interested, here’s an amusing guide to various bizarre state and municipal laws, by state:

    http://www.dumblaws.com/

    Like or Dislike: Thumb up 0 Thumb down 0

  33. anjin-san says:

    @ Catfish

    Feel free not to come here.

    Like or Dislike: Thumb up 0 Thumb down 1

  34. OzarkHillbilly says:

    @profcouch:

    Running low on meds? That is one (2?) righteous rant!

    Like or Dislike: Thumb up 1 Thumb down 0

  35. Ellen says:

    United SOCIALIST States of America!

    I use postal money orders, cuz I don’t thinknthe banks are safe. In worry they will fail before I can get all my money out. I try not to leave more than five cents. And that’s my $ .02 !

    Like or Dislike: Thumb up 4 Thumb down 2

  36. Speadeagle72 says:

    @michael reynolds: REALLY! We are a little backwards at times but anyways,,,,This is already being fought! Exempting pawnbrokers is the real joke!
    I would get our of California before we sell it to China.!
    Just voted against most of the useful idiots that voted for this crap today. Maybe mine will count!

    Like or Dislike: Thumb up 0 Thumb down 0

  37. Kelly says:

    @ponce: Pawnbrokers are EXEMPT because they are covered under different laws that already require them to have documentation. However, side effect is they can still deal in cash, where an antique dealer or garage sale can not.

    Like or Dislike: Thumb up 0 Thumb down 0

  38. weneedhelp says:

    Its OK. THey will have a great solution. The implantable microchip. Welcome to the cashless New World Order.

    Like or Dislike: Thumb up 1 Thumb down 0

  39. evil root says:

    Wow I thought I was reading an article from the Onion. This is for real? I can see that there is probably more reasons than dealing in stolen copper, like tracking income for IRS purposes. To create a digital cash society, would keep business owners from pocketing cash and thus not reporting it. Yikes jump in the swamp, the house is on fire.

    Like or Dislike: Thumb up 2 Thumb down 0

  40. bootsie barker says:

    I got rid of my debit card two years ago….i buy with cash only. The bank has no idea where I spend my money, and that’s just how I like it. I pay no ATM fees. I don’t worry about someone stealing my identity as they look over my shoulder. If everyone did that, the banks would be suffering the loss of $$$$$$ all those ATM fees which count for probably millions per year. Give them back their damn debit cards and pay cash….you’ll be glad you did.

    Like or Dislike: Thumb up 3 Thumb down 0

  41. bob says:

    @Kelly: Garage sales have nothing to do with this law. Only applies to buyers and resellers of used goods and materials. So everyone can still use cash to buy secondhand goods anywhere from anyone.
    But . . . it is still a small business killing law and the beginnings of police state.

    Like or Dislike: Thumb up 1 Thumb down 0

  42. Wendy says:

    @James Joyner: @James Joyner:
    Yes, it says so right on the bill “This note is legal tender for all debts, public and private.” This HAS to be struck down.

    Like or Dislike: Thumb up 1 Thumb down 0

  43. Lou Peyton says:

    Have we become really this stupid? Just how far should this keep going? Somewhere we have to stop and get back to being just americans.

    Like or Dislike: Thumb up 1 Thumb down 0