Legal Tender? Maybe Not, Says Louisiana Law 655
First time accepted submitter fyngyrz writes "Lousiana has passed a law that says people may no longer use cash for second hand transactions. The idea is to make all transactions traceable, thus foiling copper theft, etc. This move has profound implications that range from constitutional rights to Bitcoin, Craigslist and so forth; I wonder if there are any Slashdotters at all that support such a move." On the list of exceptions: people who deal in used goods or "junk" less frequently than once per month, and (drumroll, please) pawn shops. That means a pretty big chunk of the population who post in online classified ads in Louisiana are probably already in violation.
Federal Law State Law (Score:5, Insightful)
Re:Federal Law State Law (Score:5, Insightful)
Precisely what law? You're only required to take cash when servicing debt, not at the time of the transaction.
Re:Federal Law State Law (Score:4, Informative)
I don't know if transactions are the same as "public charges" or not.
Re:Federal Law State Law (Score:4, Informative)
They aren't. This is why it's perfectly legal to refuse cash when you sell something. But you must accept cash for loan payments and any other repayments of debt.
Re:Federal Law State Law (Score:5, Interesting)
Well, in that case, the new law should be easy to circumvent: You don't sell the product for cash, but you give it on credit, and the debt is then immediately paid back using cash.
Re:Federal Law State Law (Score:5, Interesting)
Indeed. It strikes me that simply signing an IOU and then immediately paying it ought to take care of the direct cash payment angle. Just make sure you save the IOU along with any invoices and other source documents, and I don't think there's anything the state could do about it.
Re:Federal Law State Law (Score:4, Informative)
Indeed. It strikes me that simply signing an IOU and then immediately paying it ought to take care of the direct cash payment angle. Just make sure you save the IOU along with any invoices and other source documents, and I don't think there's anything the state could do about it.
And thus you defeat the point of using cash.
The IOU must be provided to the state, essentially upon demand, so they can track what you're buying and selling.
If you can't produce an IOU, or any similar document listing what was sold and for how much and what the terms of payment were, then you'll be hit with this law.
What is the economic motive? (Score:5, Insightful)
Great point, sexconker:
If you can't produce an IOU, or any similar document listing what was sold and for how much and what the terms of payment were, then you'll be hit with this law.
Privacy keeps eroding towards no anonymity. This law does appear to restrict (and ultimately reduce) anonymous transactions.
What economic motive would provide an incentive to trace all second-hand transactions?
Tax motive: ideally taxes were paid on the first sale; are they required on all subsequent sales?
Raw consumption motive: discourages purchasing of "junk" to encourage more retail consumption?
Corporate motive: someone has to keep track of this data, a government contract winner would be excited for the data mining potential.
Other motive?
Re:What is the economic motive? (Score:5, Interesting)
Other motive?
Law enforcement: when someone steals your stereo and sells it to the second hand shop, they'll have a record of who did it, and when someone buys it from that shop before you find out and can recover it, you can find it and get it back.
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Other motive?
Law enforcement: when someone steals your stereo and sells it to the second hand shop, they'll have a record of who did it, and when someone buys it from that shop before you find out and can recover it, you can find it and get it back.
As if the cops give a shit about your stolen property.
Thanks for the LOL dude, Thursday was pretty boring up until this post.
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If I may correct you, it too the BUSH administration and FEMA, whose appointed director, was a friend of Bush, that took five days to respond to the aftermath of Katrina.
"Brownie" had essentially zero experience in running any kind of federal agency tasked with swift response.
(Indeed, one of his previous jobs was some manner of officer in a horse breeding group. And he was fired from that post, if I recall correctly)
Remember, this is the same administration that ignored the PDB of August 6, 2001, "Bin Laden
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Re:What is the economic motive? (Score:4, Informative)
Re:Federal Law State Law (Score:5, Informative)
Why circumvent an illegal law. Yes Illegal. Currency is an issue that there is no doubt in the Constitution, it's a power expressly reserved to the federal government. It's exclusively federal precisely because they had so many problems with it during the articles of confederation where the US had several dozen different currencies that were all essentially worthless. The federal courts tend to take a dim view of any attempt by the states to circumvent federal currency and bank laws because the constitution is so very direct about that authority resting with the federal government.
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States can specify alternate legal tender, if and only if it is silver and gold coin.
Article 1, Section 10:
1: No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; .
LA Can Strike Au/Ag Coin, Can't Require Use Of (Score:4, Interesting)
A state has the right to strike alternative legal tender, per Article 1, Section 10. They don't have the enumerated right to require it. Much like an employer asking your favorite sexual position, they can try. Thus, someone will soon see the state of LA in court, I suspect.
Ummm how about.... (Score:3)
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But it could be...
Debt [tfd.com] has been defined as: something that is owed, such as money, goods, or services
A cash sale for goods in a transaction could be argued to be simultaneously created debts owed to the other party, one in cash, one in goods.
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Extending credit to every stranger who says they want to buy something from you? That's so 2007.
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Not if the debt instrument is a piece of paper saying "debt item 014012212"
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Actually, nobody forbids the seller from doing a very lousy job on checking and writing down the details of the debtor. Yes, you have to turn in the record. No, it doesn't have to contain anything useful other than the amount and unreadable signatures.
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If you don't do due diligence on the loan, the courts aren't going to treat them as legitimate loans. You'll still be guilty.
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Have them pay with a cheque, then redeem their own cheque immediately for cash. Problem solved.
So you're saying they should sell you a second-hand check for cash?
Re:Federal Law State Law (Score:5, Interesting)
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Actually - but this is only semantics - the only way a transaction does not involve "debt" is if the parties involved agree to it before hand and exchange goods for goods, or goods for services, without having a currency ever involved.
Interestingly, about every currency nowadays is a debt, an IOU by the government to the central bank. More interestingly, this is a debt without cover. Government has no income or property to ever pay this debt, other than taking another loan. (federal gold reserve is a tiny d
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Of course its a debt, just a short lived one. They've just made the trade with terms that dictate the debt must be settled immediately.
Re:Federal Law State Law (Score:4, Insightful)
Actually in most cases the buyer takes possession of the item first.
You haven't taken any sort of legal possession of the stuff in your shopping cart.
Even if it were the other way around there would be a debt, the store would owe me a debt in exchange for my cash.
Which they could satisfy by returning your cash.
Or they can hand over the goods you are trying to buy instead.
In any case, there really is no debt. The transaction is settled without the creation of debt. The goods are presumed to have changed ownership at the time of the transaction. There is no silly 11 seconds of debt where you've paid them and they're waiting for your receipt to print and haven't pushed your bag over the counter to you yet.
The intention is and always was that cash could be used for transactions.
Actually no. The intention really was just with respect to actual debts, that you could always satisfy a bill collector with legal tender... he couldn't say no to federal currency and walk off with a few of your goats against your will.
It gaurantees that federally issued currency would be acceptable for debts.
It doesn't gaurantee that it would be acceptable for transactions. Its always been the case that if someone didn't want to use currency, that they could simply refuse to transact with you.
Re:Federal Law State Law (Score:5, Interesting)
Precisely what law? You're only required to take cash when servicing debt, not at the time of the transaction.
To quote my $20 - "This note is legal tender for all debts, public and private"
In a technical sense, accepting goods places a burden of debt upon the recipient.
Sounds like something which will be brought to the Supreme Court, where a state claims rights in interstate (even if it is intrastate) commerce which supersede the domain of the federal government.
Interesting ambition, but flawed.
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So, "loan" the price of the item to the would be buyer. When they take a step from the counter, demand payment. It is now a debt and may be settled with U.S. currency.
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So, "loan" the price of the item to the would be buyer. When they take a step from the counter, demand payment. It is now a debt and may be settled with U.S. currency.
Or enter into a written or verbal contract which implies a debt.
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It's easier for the dealers to just follow the spirit of the law and have a stronger position in case some of the goods were indeed stolen.
Ah, the "if you haven't done anything wrong what are you trying to hide" defense.
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Re:Federal Law State Law (Score:5, Informative)
It is legal tender, provided by the Federal Reserve (which isn't "federal" at all, it's a private bank).
Actually, the Federal Reserve System is federal. Let me contrast it with the company where I work so you can see the differences.
1. The FRS was created in 1913 by an act of congress. The place I work was incorporated in Delaware as a Delaware company.
2. The FRS is lead by the Chairman of the Board of Governers who is appointed by the President of the United States. The place where I work is lead by the Chief Executive Officer, who is appointed by the Board of Directors.
3. The FRS is run by the Board of Governors who are appointed by the President of the United States. The place where I work is run by the Board of Directors, who are selected by shareholders.
4. Congress has oversight of the FRS. The place where I work, not so much.
5. The government sets the salaries of the highest-paid individuals of the FRS. The place where I work, not so much.
6. By law, the FRS has to give any profit over 6% to the United States Treasury. In 2010, the FRS made a profit of $82 Billion. They paid the Treasury $79 Billion. The place where I work, not so much.
~Loyal
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Congress has oversight of the FRS. The place where I work, not so much.
Really? Because congress can no longer even get numbers about how much money is in circulation, how much has been printed and how much has been loaned out.
There's a reason why they had to threaten to pass a bill to audit the fed before they found out anything at all.
Also, I would like you to answer, who owns the fed? who is on the board of governers? How many appointments has each president made and who were they and on what basis have they been appointed and were they approved by congress?
Furthermore,
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Indeed. According to this nice pretty $20 bill I have here, it is a "LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE" and is signed by the Treasurer of the United States and the Secretary of the Treasury. I'm pretty sure that, in matters of currency, their authority thoroughly trumps that of the Louisiana legislators.
How the hell did they even think this would work?
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Because you misunderstand what is debt and what isn't?
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Most American libertarians still defer to the Constitution, however, and minting currency is something they generally agree the Federal government is allowed and even has a responsibility to do.
Re:Federal Law State Law (Score:4, Interesting)
Actually, the libertarians on my facebook aren't too happy about this either.
I mean, surprise surprise, libertarians aren't happy when restraints are put on personal liberty by a governmental institution. Does it matter if it's a federal government or a state government?
What states rights? (Score:3)
The Constitution specifically reserves to the federal government the power to coin money.
I thought.. (Score:3)
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It's okay, we can still pay in Nuka Cola bottle caps.
That's not debt. (Score:4, Informative)
It's only debt if the companies are accepting the goods without paying, as long as they pay up when the transaction occurs there's no legal requirement that they pay cash. Apple did a similar thing a while back when they refused to sell iPhones for cash.
Re:That's not debt. (Score:5, Insightful)
Apple did a similar thing a while back when they refused to sell iPhones for cash.
There's a big difference between Apple refusing to sell iPhones for cash and the government telling Apple it may not sell iPhones for cash.
BitCoin Spam (Score:2)
Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property and made payable to the name and address of the seller. All payments made by check, electronic transfers, or money order shall be reported separately in the daily reports required by R.S. 37:1866.
BitCoin is an electronic transfer, hence as long as it is reported it is as legal as everything else.
To me it looks like speculators have finished dumping [slashdot.org] and now want more buyers to drive up the price.
Anyway, this isn't a legal tender issue. Legal tender only applies for debt, this is why Apple can get away with no cash [tuaw.com] policies.
IANAL
Craigslist? (Score:4, Interesting)
So, if I sell a motorcycle on Craigslist and the buyer pays in cash, this is now illegal? That's somehow gotta be unconstitutional, but I need a lawyer for that... And can I pay the Lawyer in cash?
May I be the first to say... Fuck You Louisiana. I'm never going there and I hope you get wiped out by a Hurricane.
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Atheists do not claim to know there is no god anymore than other people claim to know there is no bigfoot/santa claus/tooth fairy/free lunch. You can decide to be ignorant if you want, and that is often the position of pointless rebels.
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Is not collecting stamps a hobby?
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religion: Details of belief as taught or discussed.
This is a Federal issue (Score:4, Insightful)
It would seem that this would be federal issue, not a state one since this can affect interstate commerce. Basically it's unconstitutional.
Can state law supercede federal mandate? (Score:2)
Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"?
This may be something that can be easily challenged in federal court, and I truly hope someone does challenge it.
The worst part of this state bill is that every transaction, along with the verified identity of both parties, be recorded and submitted to law enforcement on demand.
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Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"?
This is a common misunderstanding. The currency is legal tender for all DEBTS, not all transactions. When you purchase something, you are doing exactly that -- making a purchase, not paying off a debt.
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So, you sell the item to the person under net 60.
Seconds, of course, not days.
Still, that's a debt...
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Net N/T is a debt.
I will send/give you your product now, and you have N units of T time to pay me. That is debt (credit).
Net 5 seconds is legally a loophole around this for sellers IMHO (though I ma sure you would be in court for it).
More interesting, which I have yet to see covered in the treads here:
this is targeting scrap metal. When I sell scrap metal the transaction usually goes like this:
1) I haul scrap to recycler.
2) recycler takes possession of material and grades it for purity and weight
3) recycl
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Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"?
This is a common misunderstanding. The currency is legal tender for all DEBTS, not all transactions. When you purchase something, you are doing exactly that -- making a purchase, not paying off a debt.
Fine. You give me the widget you're selling and I owe you a debt of whatever you were selling it for. I pay you in cash, which "is legal tender for all debts, public and private".
The "transaction" was you giving me the widget. The paying of the debt was me giving you the cash.
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Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"? This may be something that can be easily challenged in federal court, and I truly hope someone does challenge it.
The worst part of this state bill is that every transaction, along with the verified identity of both parties, be recorded and submitted to law enforcement on demand.
Considering there is no federal mandate that says some one *must* accept US currency for payment, I think your question is moot. US currency is legal tender so you can accept it, just as you can accept anything else in payment that you want. That is the real question, IMHO - is the state's argument for limiting the use of cash compelling enough to allow it to limit your ability to choose to pay with cash?
relocate the server (Score:2)
Wonder if you can get around it by relocating the server (and payment system?) to a state/country where it's legal.
Hm, why not do it all transactions? (Score:3)
Oh, I know, because it is unwieldy and likely an illegal invasion of privacy.
No, you don't have the right to find out what I buy. Not even if I am poor and can only afford second hand stuff.
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Traceability (Score:3, Interesting)
My understanding is that pawn shops are allowed to use cash because they're already legally required to keep detailed records about the individuals with whom they deal, and this law is all about making it hard for criminals to sell stolen goods without a paper trail.
But this seems like a case of legislatively throwing the baby out with the bath water: "I'll sell you this book of mine for $5, but you'll have to write me a check because I sold someone an old XBox game last week for cash." Or are small private transactions not regulated by the law (I haven't read the text of the bill, obv.)?
If not, this seems outrageous, and I'm all about the outrage!
Le Tax? (Score:4, Interesting)
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I am thinking you are 100% correct!
You win one free internets, not redeemable in states that require tracking of electronic transactions.
Summary is completely false (Score:5, Informative)
The first link in the summary contains the complete text of the bill. It does not ban cash transactions at all. Rather, it requires second-hand dealers to keep very thorough records of any cash transaction exceeding $25.
This is a terrible law, and would make business difficult for a lot of people, and (depending on how it's interpreted) could make garage sales more trouble than they're worth. But it does not ban the use of cash. I kind of wish it did, because then it would be struck down. As it stands, the law may pass constitutional muster, and become an enormous pain in the ass for a lot of people.
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Re:Summary is completely false (Score:5, Informative)
You read the original, unammended bill.
The bill as signed does indeed prohibit cash for second-hand transactions in Section 1864.3:
http://www.techdirt.com/articles/20111019/17424316421/louisiana-makes-it-illegal-to-use-cash-secondhand-sales.shtml [techdirt.com]
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Charging money to someone for your billable time might be an interesting way to get around the issue.
Your own time is valuable. You may decide to charge a different amount at any time which might coincidentally correspond with the price of you item on Craigslist.
Example:
I have an interesting table with a great history. I would like to tell you all about it. If you pay me a minimum of $100/hr (rate negotiable)., I would be more than happy to tell you all about it. If you are so inclined, you may also take
Slashdotters? (Score:2)
I wonder if there is any sane human being that supports such a move.
Fixed that for you.
Yeah, but how would they know? (Score:2)
Are they going to get a bunch of undercover agents to stake out craigslist? And what happens when people figure out they're living in an evil distopian future? You can't start pulling this sort of shit on the average joe until it is actually too late for them to do anything about it.
Why did their Republican Governor sign this? (Score:3)
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All of a sudden?
Have you not been paying attention for the last many decades?
They might love to claim otherwise but restricting personal freedoms and getting that sweet tax dollar is what they are all about. The only thing they love more than taxes is restricting personal freedoms.
Railroad tracks? (Score:2)
This is just a law to keep scrap dealers from buying stolen metal. There's been trouble with people stealing copper power lines (this usually makes the news when someone tries to steal an energized one), manhole covers, and the aluminum access covers at the base of street light poles.
Much of the bill is about people selling railroad tracks and parts thereof. Railroad tracks? Do you realize what it takes to lift and move a railroad rail? That's not something one homeless guy could do. It takes teams, cra
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There's been trouble with people stealing copper power lines (this usually makes the news when someone tries to steal an energized one), manhole covers, and the aluminum access covers at the base of street light poles.
So maybe instead of imposing a stupid burden on everyone, they could catch people who are stealing stuff?
Just an idea.
Isn't this the state... (Score:2)
Tin foil hat (Score:4, Insightful)
I love how people over the years say I need to wear a til foil hat every time I mention that it is just a matter of time before the governments move to try to limit, stop, or remove the idea of "cash". Obviously there are Constitutional issues around this, but that never seems to stop the governments. And when it gets too annoying, they can just change the Constitution.
It is not difficult to imagine a world where anything that gives you freedom from being monitored, traced, taxed, restricted, recorded, etc, is eliminated. I keep hoping it will at least wait until I am very old. Younger people don't seem to care about privacy or freedom anyway- they only want safety and convenience, so let THEM deal with it!
hmm (Score:3)
So how much is that in cigarettes?
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All I can say is... (Score:3)
checking calendar. Nope, its not April 1, wtf? (Score:2)
Is this a serious thing? IANAL but this could be attacked from a number of angles. Invasion of privacy. Regulation of currency beyond state's rights.
Re:Reason #666 to move out of LA (Score:4, Funny)
In my just as fictional religion I made up on the spot it is a sign of bright new future that will give everyone a free pony and a lifetime supply of cheese in can.
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Then the clergy of your shiny new religion can urge their congregations to re-elect these guys.
The clergy of that other religion can urge their congregations to vote the bums out.
Let's see who wins.
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Mmm Mmm Mmm, so, how often do I get my free stea-----um pony?
Is cheese in the can the proper condiment for pony?
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How else can we make sure everyone gets their cheese?
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Losing the ability to use cash when buying or selling is one of the signs of the end times documented in the holy text of at least one major religion.
Relax, it's nothing more than a state trying to swat flies with a hammer, rather than shut the window.
It'll be slugged out in court and ultimately retired as it's effectively a State attempting to regulate commerce by feat of selecting its own coin.
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Actually, it's the interpretation of a highy-symbolic passage in the holy text of a major religion by a certain subset of believers. Nobody outside of America interprets it that way (nor the whole "rapture" thing either).
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Great but what they are banning aren't debt payments. An upfront payment for a good or service is not servicing a debt.
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And they aren't banning using cash for debt payments. Upfront purchases are not debt payments. Hence why I can sell something and refuse to take cash. Now if I loan out money I can not refuse a cash payment.
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What if I loan you the value of an item and then demand payment of the debt 10 seconds later?
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You're ignoring the keyword "debt".
Fine. You give me the widget you're selling and I owe you a debt of whatever you were selling it for. I pay you in cash, which "is legal tender for all debts, public and private"
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agreed, debt was clearly intended to cover what is owed for a sales transaction. Simply put, you could force a customer to receive the goods before they may payment, then there is in fact a debt to be paid.
The actual law behind that (Score:2)
Section 31 U.S.C. 5103, "United States coins and currency are legal tender for all debts, public charges, taxes, and dues."
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It is one thing for a private business to refuse to accept cash for a transaction.
It is another entirely for a government to mandate that ALL businesses (dealing in secondhand goods) cannot accept cash for a transaction.
As much as people like to give Apple a dick in the ass on /. this is a VERY different situation.
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Doesn't this make all tag sales, flea markets and most Craigslist transactions illegal as well?
Excuse me, does your Yard Sale accept American Express?