Plaintiffs in the case of Halstead Bead v. Richard, a case challenging the constitutionality of Louisiana’s remote-sales tax structure, have filed a notice to appeal the decision of the Eastern District Court of Louisiana to the U.S. Court of Appeals for the Fifth Circuit.
Halstead Bead is a small business based in Arizona challenging Louisiana’s remote-seller sales tax structure. Halstead estimates that they must spend roughly $2.28 on compliance costs for every $1 remitted in sales taxes - meaning that in a state as complex as Louisiana, it’s not worth it to even do business at all. That means that both state tax coffers and local businesses and consumers lose out on what should be ordinary interstate commerce.
“The reasoning in the Eastern District Court’s decision to dismiss on Tax Injunction Act grounds is wrong," said lead attorney and NTUF Executive Vice President Joe Bishop-Henchman. "Halstead Bead is willing to remit taxes but the complexities of Louisiana’s tax registration and reporting system make it prohibitive for them to do so. We’re confident that when this case is considered on the merits, we will prevail.”
Louisiana’s remote-sales tax structure does not follow the guidance laid out by the Supreme Court in its Wayfair decision, and specifically that sales tax rules not impose unreasonable compliance burdens on small businesses and having tax administration done at the state level.
NTUF’s Taxpayer Defense Center, The Pelican Institute, and the Goldwater Institute have teamed up to represent Halstead Bead in this landmark federal lawsuit. It’s clear that remote-seller rules need to be clarified by the federal court system in the wake of the Wayfair decision, and Halstead Bead’s case must be considered on the merits.
To discuss the ongoing Halstead case and other remote-sales tax rules with an expert from the Halstead legal team, please contact Kevin Glass, NTUF Vice President of Communications, at 703-299-8670 or at kglass@ntu.org.