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Coin Community Fears Damage From Repeal Of Sales-Tax Exemptions; Maryland Current Battleground
mrearlygold
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Coin Community Fears Damage From Repeal Of Sales-Tax Exemptions; Maryland Current Battleground
Michigan coin dealer Pat Heller saw how much it helped business when his state instituted a law that exempted sales taxes on precious-metals coins…and he noticed how dealers in neighboring Ohio were hurt when such an exemption was taken away.
Industry officials say the lack of such exemptions hurts dealers in those states since many potential customers might simply buy from elsewhere. Furthermore, they argue that a sales tax is inappropriate for an investment product such as gold anyway; after all, there aren’t sales taxes when buying equities or real estate as an investment.
As a result, the Industry Council for Tangible Assets—a trade group for the rare coin, precious metals and tangible assets industry--is urging members to monitor their state legislators for any attempts to take away exemptions, as well as to speak on behalf of dealers in the most recent sales-tax battleground of Maryland. If the state loses its exemption, others could follow, starting a “domino” effect, ICTA said in an alert to its members. Plus, ICTA said, loss of the Maryland exemption could be a threat to a series of well-attended coin shows held in Baltimore.
Michigan exempted sales taxes on precious-metals coins in 1999, said Heller, owner of Liberty Coin Service.
“From the time we got our exemption, our company’s total sales have gone up 10 times,” Heller said. “But, our in-state retail sales have increased about 30 times. The business has been good, but the improvement in Michigan retail sales was highly affected by the existence of the exemption.”
Heller’s business grew from six to 22 employees.
“There have also been more conventions in Michigan,” he continued. “Ohio used to have an exemption. And because of that, many Michigan dealers would go to coin shows in Ohio to set up and do business.”
When Michigan approved an exemption, its dealers began staying in-state to set up coin shows. Then when Ohio lost its exemption, dealers from there began traveling to Michigan to set up shows, Heller said. This meant the exemption also benefited Michigan hotels, restaurants and gas stations.
Further, Heller said, there were estimates that within six months after Ohio revoked its sales-tax exemption, at least 100 coin dealerships closed or else cut back their staff. “It had an immediate and dramatic effect.”
Industry Told To Be On Lookout For Threats To Sales-Tax Exemptions
Continued here:
Coin Community Fears Damage From Repeal Of Sales-Tax Exemptions
Michigan coin dealer Pat Heller saw how much it helped business when his state instituted a law that exempted sales taxes on precious-metals coins…and he noticed how dealers in neighboring Ohio were hurt when such an exemption was taken away.
Industry officials say the lack of such exemptions hurts dealers in those states since many potential customers might simply buy from elsewhere. Furthermore, they argue that a sales tax is inappropriate for an investment product such as gold anyway; after all, there aren’t sales taxes when buying equities or real estate as an investment.
As a result, the Industry Council for Tangible Assets—a trade group for the rare coin, precious metals and tangible assets industry--is urging members to monitor their state legislators for any attempts to take away exemptions, as well as to speak on behalf of dealers in the most recent sales-tax battleground of Maryland. If the state loses its exemption, others could follow, starting a “domino” effect, ICTA said in an alert to its members. Plus, ICTA said, loss of the Maryland exemption could be a threat to a series of well-attended coin shows held in Baltimore.
Michigan exempted sales taxes on precious-metals coins in 1999, said Heller, owner of Liberty Coin Service.
“From the time we got our exemption, our company’s total sales have gone up 10 times,” Heller said. “But, our in-state retail sales have increased about 30 times. The business has been good, but the improvement in Michigan retail sales was highly affected by the existence of the exemption.”
Heller’s business grew from six to 22 employees.
“There have also been more conventions in Michigan,” he continued. “Ohio used to have an exemption. And because of that, many Michigan dealers would go to coin shows in Ohio to set up and do business.”
When Michigan approved an exemption, its dealers began staying in-state to set up coin shows. Then when Ohio lost its exemption, dealers from there began traveling to Michigan to set up shows, Heller said. This meant the exemption also benefited Michigan hotels, restaurants and gas stations.
Further, Heller said, there were estimates that within six months after Ohio revoked its sales-tax exemption, at least 100 coin dealerships closed or else cut back their staff. “It had an immediate and dramatic effect.”
Industry Told To Be On Lookout For Threats To Sales-Tax Exemptions
Continued here:
Coin Community Fears Damage From Repeal Of Sales-Tax Exemptions
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
0
Comments
Ed. S.
(EJS)
(don't forget gold is over $1000/oz)
We are talking about taxing sales over $1000, but I argue that $1000 and more would 1. fall into the investment realm, 2. investment transactions are already subject to capital gains taxes, and 3. sales taxes would be double taxation and no one has sales taxes for investments (land? stocks? bonds? funds?)
and I'm being nice and not arguing that all sales should be exempted.
``https://ebay.us/m/KxolR5
<< <i>Maryland should take a look at when Florida tried to do the same thing and came close to killing the FUN Show. Thank goodness reason prevailed! >>
Right, or before jeb bush repealed the sales tax that lawton chiles imposed on the state crushing the retail coin business here.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>I wouldn't assume what the average sale is in MD.
(don't forget gold is over $1000/oz) >>
Well, I was excluding bullion. I think that bullion coins (at least, Au, Ag, and Pt) should not have a sales tax, at least when sold within a "reasonable" or "typical" mark-up from bullion value.
<< <i>We are talking about taxing sales over $1000, but I argue that $1000 and more would 1. fall into the investment realm, 2. investment transactions are already subject to capital gains taxes, and 3. sales taxes would be double taxation and no one has sales taxes for investments (land? stocks? bonds? funds?) >>
On (1), I don't think you can define investing vs noninvesting that easily. Using a bullion analogy, someone who buys a roll of random dates ASE's would not be investing, whereas someone who buys a single 1 oz AGE each year of the current year, looking for the best (raw) one, is investing instead of collecting. And the few times (well, the one time) I've made a purchase over $1,000, it was still for collecting, and frankly, at the time I wasn't expecting that I'd make money off of it.
On (2/3), first, I think "double taxation" is incorrect if not just plain meaningless. The sales tax applies on the event of an end user purchasing a taxable item. The capital gains tax is on the event of taking a profit of a former purchase. Two different things. Plus, if we were to take "double taxation" seriously, we would have to figure out what part of our incomes were previously taxed money. And how shall you do that? Shall the stores figure out what fraction of their sales go to governments or government employees, and thus already taxed? And then shall the stores figure out what fraction of that goes to their employees to be exempt from income tax? Shall all state/local government (and some fraction of federal pay) employees be exempt from all taxes, as (all or nearly all) their money was previously taxed money? I think we can only get to incalculable absurdities that way. It's just easier and more correct to realize that sales and capital gains taxes tax different events and be done with it. Hell, be happy that capital gains somehow (for some people, at least) get taxed at a lower rate, for some reason (there's no correlation between the capital gains top tax rate and employment gains, so it's not about job creation).
Ed. S.
(EJS)
Like many governmental decisions, it depends on your point of view. Favorable conditions in one location is a way of attracting new business and investment, and it always has been. Again, in the Heller example, Ohio's loss is Michigan's (and maybe Indiana and Pennsylvania's) gain.
spelling edit