The problem: Federal tax on coins; The solution: Become a dealer
RYK
Posts: 35,797 ✭✭✭✭✭
I just received the latest issue of Fun-Topics.
In the ICTA Update page, Diabe Perit wrires about the impending (?) National Sales Tax and how it could be quite deleterious to the rare coin market.
Buried on page 40, in the "Intelligent Collector" column, penned by Jim Halperin (of Heritage), in a completely different context, Halperin suggests that serious collectors should become dealers, in part to avoid sales tax on coins. What does it take?
1) Legal opinion from tax attorney
2) Register your business as a sole proprietorship
3) Obtain a resale certificate
4) File quarterly sales tax reports (if applicable)
5) Keep up with market trends (most active collectors already do)
6) Run ads offering items for sale (ie. ebay)
I suspect if a national sales tax is implemented, as many suggest, serious collectors will take these steps to become dealers. Talk about wannabes!
In the ICTA Update page, Diabe Perit wrires about the impending (?) National Sales Tax and how it could be quite deleterious to the rare coin market.
Buried on page 40, in the "Intelligent Collector" column, penned by Jim Halperin (of Heritage), in a completely different context, Halperin suggests that serious collectors should become dealers, in part to avoid sales tax on coins. What does it take?
1) Legal opinion from tax attorney
2) Register your business as a sole proprietorship
3) Obtain a resale certificate
4) File quarterly sales tax reports (if applicable)
5) Keep up with market trends (most active collectors already do)
6) Run ads offering items for sale (ie. ebay)
I suspect if a national sales tax is implemented, as many suggest, serious collectors will take these steps to become dealers. Talk about wannabes!
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Comments
This would all but kill the hobby for the average collector. As RYK said, all serious collectors would have to become dealers. It's relatively simple and allows you to deduct expenses. I'm just not sure the hobby would remain as stable without the average common JQ Public buying state quarters and the such. Paying 25% tax would be a burden. It has all but killed the coin hobby in many European nations.
A federal tax is no doubt coming. We have no current way to fund future entitlements. Europe has already gone that way and raised payroll taxes to as high as 40-50%. We're next in the tax scheme.
Either that has to occur or govt has to shrink and benefits reduced.
What do you think will happen?
roadrunner