February 15, 2022
A response brief has been filed in the Eastern District Court of Louisiana in the case of Halstead Bead v. Lewis. The National Taxpayers Union Foundation, the Pelican Institute, and the Goldwater Institute have teamed up to represent Halstead Bead, a small Arizona-based business, in a constitutional challenge to the onerous state tax collection structure in place in Louisiana. Plaintiffs have responded to the state’s myriad arguments in full, demonstrating that the case being made by the defendants is completely untenable.
As detailed in Halstead Bead’s response briefs, Louisiana’s sales tax regime is an unconstitutional burden on interstate commerce. The current Louisiana sales tax regime creates barriers to doing business through a combination of red tape, local rules, and paperwork that must be filed in order to sell to Louisianans online. For many businesses, this makes it too difficult and costly to do business in the state.
“Forcing a small business in Arizona to separately collect taxes for each parish in Louisiana is unreasonable and unconstitutional,” said Goldwater Institute Senior Attorney Jacob Huebert. “Halstead Bead deserves to have its day in court to challenge this costly, harmful scheme.”
There are more than 11,000 local tax jurisdictions that small businesses must comply with around the country, and failing to remit sales taxes down to the penny can see them criminally charged. Halstead Bead estimates that the compliance cost of the sales taxes they are subject to is $2.28 for every dollar collected and remitted in sales taxes, and that their business has had to spend more than 7,700 hours over the last three years on sales tax compliance. An easy fix for Louisiana could streamline their collection to one central administration point as other states have done, greatly alleviating the burden on small businesses.
Halstead Bead is a small family-owned business—just one of thousands across the country that are being squeezed relentlessly by the burden of overly complex sales tax regimes. State governments have a responsibility to the economy and to their own citizens to ensure that sales tax laws don’t make it impossible to actually conduct business.
The lawsuit is Halstead Bead v. Lewis, and it is filed in the Eastern District Court of Louisiana. For more information on the case or to speak with the clients bringing the suit or a member of the legal team, please contact Jennifer Tiedemann at firstname.lastname@example.org.