Release: New Lawsuit Intends to End Louisiana’s Red Tape Nightmare for Small Businesses
NEW ORLEANS– Louisiana’s approach to sales taxes has created a red tape nightmare for businesses. With retailers forced to deal with a wide variety of local rules and mounds of tax paperwork just to be able to sell their products in the state, the hurdles are just too high for many companies to make it work.
That’s why today, the National Taxpayers Union Foundation (NTUF), the Pelican Institute, and the Goldwater Institute have teamed up to represent one small Arizona-based business to challenge Louisiana’s onerous sales tax structure, arguing that the state places an unconstitutional burden on businesses that wish to sell to Louisianans.
Halstead Bead, a family-owned jewelry and craft supply wholesaler based in Prescott, Arizona, has filed a lawsuit against the tax collecting authorities in the Louisiana Department of Revenue and Lafourche, Tangipahoa, and Washington parishes challenging the state’s complex sales tax system. Halstead Bead sells to customers across the country but limits sales to Louisianans because of the immense burden the state’s antiquated system places on small businesses, especially online retailers.
“Louisiana’s overly complex sales tax collection process places an undue burden on small businesses and is in direct conflict with the U.S. Supreme Court’s 2018 Wayfair decision. To be fair to small business owners like the Halstead family and to provide more options for consumers, Louisiana needs to streamline their sales tax collection process to make it easier to do business in the state,” said Sarah Harbison, General Counsel for the Pelican Center for Justice.
Halstead Bead estimates that the cost to comply with the current system in Louisiana is $2.28 for every $1 they collect in taxes from sales. Over the past three years, they have spent 7,700 hours and $297,000 on sales tax compliance nationally. Across the country, small businesses that do the bulk of their sales online face rules and regulations from more than 11,000 local tax jurisdictions with which they must comply; failing to get sales tax remittance correct down to the penny carries the risk of criminal charges. Louisiana could ease the burden on small businesses by streamlining collection to one central collection point.
“Louisiana makes it extremely hard to do business in the state because of the countless hours and dollars it takes to ensure accurate compliance with all of the taxing jurisdictions,” says Brad Scott, Halstead’s Director of Finance. “We don’t have the tools; we don’t have the resources, but we still have outrageous compliance demands. It’s overwhelming, and both businesses and consumers alike suffer because of the fragmented nature of the Louisiana sales tax collection system.”
The lawsuit is filed in the United States District Court for the Eastern District of Louisiana. To speak with the clients bringing the suit or a member of the legal team, please contact Ryan Roberts (email@example.com).
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