Louisiana Makes It Illegal To Use Cash To Buy Used Goods
In Louisiana, that cash in your pocket is now worthless if you want 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.
So this basically shuts down every Antique mall, pawn shop, junk yard, etc, etc, in the state…
Talk about unintended consequences.
You raise the most salient point: States simply have no right to declare that US currency is not legal tender. Period.
My first thought as well, but I’m not a lawyer.
This is actually a pretty big step towards a police state.
Haha, that sentence is a perfect example of how corrupt politics works.
The politicians probably sponsored this law just to shake down pawnbrokers.
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.
Bipartisan support and signed by a Republican Governor. Wow. Not what I would expect.
Hookers are in trouble. Wait…is that used goods…or a service?
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.
The Volokh Conspiracy has the beginnings of a legal discussion w/ some interesting comments.
@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.
Well if that isn’t a small business killing regulation I don’t know what is.
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.
I knew it would finally happen – Confederate money makes a comeback! I’m rich, I’m rich!
“0ld times there are not forgotten”
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.
it’ll never hold up in court.
Do Southerners just sit around all day thinking of stupid laws to pass?
@michael reynolds: California is the only state that has actually been issuing currency.
@michael reynolds:
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).
Once again, I’m relieved I live in a fairly reasonable part of the country…..
@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.
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.
Okay, fair enough, everyone, I surrender: I’m living in a great big glass house called California.
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.
@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.
@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.
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.
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.
@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
@Russell:
SCRIPT
MAKE OUR OWN MONEY
YEAH!
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.
For anyone interested, here’s an amusing guide to various bizarre state and municipal laws, by state:
http://www.dumblaws.com/
@ Catfish
Feel free not to come here.
@profcouch:
Running low on meds? That is one (2?) righteous rant!
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 !
@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!
@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.
Its OK. THey will have a great solution. The implantable microchip. Welcome to the cashless New World Order.
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.
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.
@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.
@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.
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.