Louisiana Makes It Illegal To Use Cash To Buy Used Goods

(Doug Mataconis) 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.