A trickey issue "sales tax"

barberlover

I can purchase a coin from a dealer in New York or Caifornia living in a different state or on the internet if the seller is in a different state then mine, so why do we have to pay sales tax on coins purchased in our home states which puts local dealers at a dissadvantage with there easyest to reach customers ?

clw54

Good luck getting your state to repeal sales tax.

09sVDB

State gov't greed.

cascade

In Michigan there is no sales tax on coins. I didn't know other states charged tax on coins.

Outhaul

I won't bid on any auction that will charge me state sales tax. I'm certain there are a lot of sellers out there collecting it and not paying it to the state. I will not contribute to their delinquency.

I was going to bid on an auction where the seller was from NH (no...not bigD5) but he stated in his auction that MA residents had to add the 5% state sales tax. I e-mailed him and asked why I should pay it to him when his biz operates and has its mailing address in NH which has NO sales tax?

All he said was if you don't want to pay it don't bid. Pretty shady to me.

Cheers,

Bob

coingame2000

In California, if the total purchase excceeds $1,000 it is exempt from sales tax.

Best Regards,

Mike

CalGold

It seems that companies that have places of business in certain states like California must collect sales tax from residents of that state, even if the sale is held in an other state.

As Coingame points out, the California sales tax (probably the highest in the country) does not apply if the coin costs more than $1,000. Of course with the huge budget deficit, the state is scrambling for every dime it can find so I will not be surprised if the exemption for sales over $1,000 is repealed.

CG

Edited to add: However, Gray Davis (the Gov) is such an idiot, there is no telling what will actually happen with state taxes.

coppercoins

All numismatic items are exempt from sales tax in Missouri. Of course supplies are still taxable - just applies to collectible coins.

semicycler

Sales tax laws vary from state to state. Some states tax everything, some tax non-essentials, some tax nothing. With coins, there are often state laws exempting sales tax when purchasing over a certain amount. In order to collect sales tax, you need often need a state company ID number, similar to a social security number. It is not practical for business to register in every state and collect taxes - could you just imagine the paperwork you would need to file each year?!?

So, companies will only collect sales tax for in state purchases. But, this does not mean you are free from paying sales tax on out of state purchases. In NJ, there is a line on your state income tax form for uncollected sales tax on out of state purchases. You are supposed to list the total of all out of state purchases where sales tax was either not collected or collected at the out of state lower rate then pay the difference. I suspect other states have similar laws.

crito

Colorado also has a sales tax exemption on numismatic items. be careful of dealers who try and collect it anyways, it happened to me twice

Nysoto

Washington State has a very steep sales tax, fortunately coins are exempt from this tax.

quarterjack

Ohio, exempts coins and bullion in (Coin form), from sales tax. Supplies are taxed along with anything ordered over the internet that you didn't pay tax on! Next the states will want to add an EXISTANCE TAX!

Dave

sinin1

barberlover - MN has a use tax which complements and is similar to the sales tax. It applies when a buyer does not pay Minnesota sales tax on tangible personal property purchased for storage, use or consumption in Minnesota. The use tax rate is 6.5 percent, the same as sales tax rate. When you go to your accountant, you should file Form UT-1, Consumer's Use Tax Return with your M-1 state tax form.

I have a friend who works for the state of MN answering sales tax questions and I have asked him about my "occassional" internet sales on eBay and whether I need to collect taxes - answer depends on if for profit and just how occasional (garage sale type - or 500 items per week)

So, although very few people file this Use Tax - the state will have a Jesse Ventura deficit for a few years - even with Carol Molnau running the transportation department for free.

lathmach

There's no sales tax on coins here in Michigan.

Ray

relayer

Don't worry. If Congress has their way, we'll soon be paying sales tax on all Internet sales.

geb209

Here's the reason you pay sales tax on in-state purchases. The Supreme Court has held that the Commerce Clause, the Fourteenth Amendment, and another part of the Constitution (of which I cannot recall right now) limits the ability of states to impose sales tax. Without going through all the boring details, the issue is whether you, as the buyer, have a sufficient number of "contacts" to the taxing state. Hence, if you purchase over the telephone or internet to an out-of-state dealer, you don't have sufficient contacts with the state in which the dealer resides for that state to tax. If you buy from a dealer in the state in which you reside, of course you have sufficient contacts with the state. Thus, you'll be taxed.

Most people often forget that many states also have a "use" tax. A use tax is like a sales tax but applies when you bring or ship an item to a particular state in which you have contacts. You are given a credit for any sales taxes paid on the purchase.

Hope this helps.

BillJones

Sales tax is the bane of a dealers’ existence. Many dealers and collectors want to evade it, which makes life difficult for honest people. Now that so many state governments are in the red the situation is only going to get worse. Sales taxes agents will descend on shows are start some horror shows like they have in past.

In New Jersey one agent surrounded a well known dealers’ table with crime scene tape and threatened to confiscate his inventory because he did not have a NJ resale number. In Boston the state sales tax agents set up shop in the lobby of show and harassed every dealer who was there.

The New Jersey brought an end to that multi day show. In the end the state last all the meal and hotel taxes as well has the business that the show regularly generated for the area in which the show was held. That was a lesson on how to cut off your nose to spite your face. The Boston show survived, but was hurt for a few years.

The next time a dealer mentions sales tax, don’t get mad at him. We face audits and fines and have to cover our butts. If you want to complain, go to the state legislature. Even in the People’s Republic of Massachusetts the law was amended so that sales of coins or bullion in excess of $1,000 are exempt from the tax, which is a big help.

Here’s a list of the states that I know:

NH – no sales tax
Mass. - Tax on all coin and bullion sales that are less than $1,000
Connecticut - No tax on coins
Florida – No tax on coins – Thank you Jeb Bush!

PhillyJoe

I don't think sales tax is an issue at smaller shows, but it's a big deal at the larger shows. Last year we talked about settting up shop at an empty table at Baltimore and we found out more than we wanted to know about Tax I.D.s andsales tax. Here's some questions:

Do dealers have to file state income tax returns in addition to sales tax returns for out of state shows?

Do you remit the tax before you leave the show? Does anyone check your books near the end of the show?

If I buy a $500 coin in exchange for my coin and $100 is there sales tax? On the $100 or the 500?

I doubt a sales tax agent goes to a 30 table show at a VFW. How 'bout a 50 dealer show at a hotel?

I realize these are very general questions, but I'm looking for some dealer feedback. Thanks.

Joe

littlewicher

How high is the sales tax in California for purchases under $1,000? Here in my area, sales tax is 8%.

presleyh

In Chattanooga the tax is 9.25 for the first 1600.00, then 9.75 for the next 1600.00, then 7 percent for sales exceeding 3200.00. Interestingly since the tax was raised to these levels sales tax collections have decreased in our city and county. Many people are now crossing into Georgia to buy groceries at 0% sales tax.
The Tennessee government is highly dependent on sales tax. We don't have a state income tax, yet.
The term "nexes" is used to describe who should collect the tax. If an out of state company has a physical location in Tennessee they have Nexes and must collect the tax. Otherwise there in no legal authority to cross state lines to prosecute tax evaders. The feds don't care about state tax. The ability to avoid tax by buying out of state has killed many businesses in Tennessee and is severely limiting mine. If you save $925.00 on a $10,000.00 purchase why would you buy locally?

ScarsdaleCoin

my 2 cents...the state sales tax is nothing but a pain in the neck....I do charge my 6.75% and each NY sale I post in a log...at the end of the year I forward this tax to the government...my reading shows that you guys agree...why buy a item from a NY dealer and pay the tax when you can buy it somewhere else and not pay the tax...

BillJones

<In Chattanooga the tax is 9.25 for the first 1600.00, then 9.75 for the next 1600.00, then 7 percent for sales exceeding 3200.00. >

Remind me not to set foot in Chattanooga, at least not on busines.

Can you spell CONFISCATORY? A tax structure like that is enough to make crooks out of honest people and drive the host state into bankruptcy.

freezer

My place of biz is in NH..The first year that I did services in MA. , MA sent me a bill for sales tax that they estimated I owed.When I disagreed with this they demanded an Audit of my books.I hadnt charged my customers a sales tax...Boy did I take a beating...

BillJones

Yep,

A lot of people don't realize how hard the tax vultures can descend when they smell blood in the water. If they think that another tax entity is entitled to a piece of your carcass they will call in the rest of buzzards to feed on your corpse.

Never, never mess with the tax people. It’s hard to win because you are presumed guilty until you can prove yourself innocent. And if you are innocent, your defense money is down the drain, and the tax people don’t even have the decency to say, “We’re sorry.”

My dad got into tax trouble one year when his accountant messed up his return. He paid the taxes and the penalities, but he was on the IRS "hit list" for the rest of his life.

kranky

<< <i>Never, never mess with the tax people. >>



Wise words!

presleyh

Bill you are right. Tennessee is extremely anti business. The largest restaurant equipment dealer in Chattanooga is really in Columbus Ohio. Restaurant equippers ships more tax free equipment into our town than all of us dealers sell combined. Also calculating the tax is a nightmare each month.