Lawsuit filed challenging Louisiana sales tax system by out-of-state business

An out-of-state business today sued Louisiana and several parishes to challenge the state’s patchwork approach to collecting sales taxes, days after voters rejected a constitutional change that would have centralized those tax collections in a single board.

Halstead Bead Inc., an Arizona-based business that sells jewelry-making supplies online, contends Louisiana’s approach of collecting sales taxes on a parish-by-parish basis and requiring out-of-state businesses to file reports in each parish where sales are made creates a “compliance nightmare.”

The company is asking the court to declare Louisiana’s fragmented sales tax registration and remitting requirements an unconstitutional burden on interstate commerce, among other violations of federal constitutional protections.

Halstead Bead is represented by small-government, right-leaning groups including the National Taxpayers Union Foundation, the Pelican Institute for Public Policy and the Goldwater Institute.

“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,” Brad Scott, Halstead’s finance director, says in a statement released by the Pelican Institute. “We don’t have the tools, we don’t have the resources, but we still have outrageous compliance demands.”

The lawsuit was filed this morning in federal court in New Orleans. It names as defendants state Revenue Secretary Kimberly Lewis and the sales tax collectors in Lafourche, Tangipahoa and Washington parishes. Read the full story.