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National Online Sales Tax & the Coin Market
C0inCollect0r
Posts: 374 ✭✭
Hi folks,
I've been reading a little about the possibility of a National online sales tax being passed by Congress in the near future. I am just curious how you all feel this would ultimately impact the coin market. In a relatively low margin industry like this that is increasingly shifting online, it seems it could have a very significant effect.
How likely do you think it is that they will pass a national online sales tax in the next year or two? How feasible will the actual implementation be for coin dealers? (It seems like it could be quite a mess to deal with all of the countless state/district laws)
I read that they recently were supposedly considering an "origin" alternative to that would basically charge the "seller's" tax rate instead of the "buyer's" - something that would seem to potentially doom many online coin dealers in states like California with high state tax rates.
Anyway, any thoughts/comments/guesses would be interesting to hear.
I've been reading a little about the possibility of a National online sales tax being passed by Congress in the near future. I am just curious how you all feel this would ultimately impact the coin market. In a relatively low margin industry like this that is increasingly shifting online, it seems it could have a very significant effect.
How likely do you think it is that they will pass a national online sales tax in the next year or two? How feasible will the actual implementation be for coin dealers? (It seems like it could be quite a mess to deal with all of the countless state/district laws)
I read that they recently were supposedly considering an "origin" alternative to that would basically charge the "seller's" tax rate instead of the "buyer's" - something that would seem to potentially doom many online coin dealers in states like California with high state tax rates.
Anyway, any thoughts/comments/guesses would be interesting to hear.
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Comments
It's never enough...kinda like pouring water down a rat's hole.
"Money does not care about speeches on morality. Capital asks whether the rules will remain the same tomorrow. With inflation, people assume price is the problem, and propose regulation—but price is simply the message." - Martin Armstrong
If it is enacted it will have a very negative impact on the coin and other collectible markets. Many folks will just start saying "no" and leave the field.
<< <i>Government's solution to everything is MORE taxes.
It's never enough...kinda like pouring water down a rat's hole. >>
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't an optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me. . . . . . .
Many people who buy coins primarily as investments will walk away from the market if they have to pay a significant sales tax on purchases, simply because the acquisition of other types of investments will become relatively more attractive in terms of total cost.
Many people who buy coins primarily as a hobby will tend to reduce spending on coins, and will tend to hold their purchases longer than they otherwise might.
Dealers that play by the new rules will have to scale down their operations. Those that don't play by the rules will thrive, at least until they are caught.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Just to throw a wrench in the works not all states tax coin or bullion sales. How is that going be taken into effect? >>
For the case of eBay, let them be the collector. Why does Calif need 100,000 new tax collectors when one will do? Every place/jurisdiction that collects tax will have a tax code i.e. CA000011. Each seller determines the tax code for their area and inserts it into his/her listing or appropriate spot that ebay has designated for it. The eBay invoice automatically allows for and collects the tax.
<< <i>While they are doing those Cal. ones be sure to take into effect combined Purchases of over $1500 they are tax exempt also. Oh the night mare's the programmer's will have. >>
Esp. when the combined invoice exceeds $1500 and one item gets returned driving it under $1500.
NOSTRADAMUS
A compulsory VAT would force me to close my online store and take more tables at shows plus do more business at coin club meetings. Its possible I would liquidate everything numismatic related anyhow and put the money in a portfolio on etrade. I have it with the anemic bids in the CDN, people who won't pay retail, plus the grading and sticker game. I see more shops that say "Gold and Silver Only."
<< <i>There are some states, like Florida, that have no sales taxes on U.S. coin sales. I wonder what this will do to that situation? >>
They've never met a tax they didn't like.
Do you think they'd let Florida skate?
<< <i>There are some states, like Florida, that have no sales taxes on U.S. coin sales. I wonder what this will do to that situation? >>
Any system would create or allow for an exemption code. A national sales tax would not necessarily have to follow what the states do.
All they can do is tax and spend, and tell us to go to hell if we complain about it.
<< <i>Government's solution to everything is MORE taxes.
It's never enough...kinda like pouring water down a rat's hole. >>
The used to be the King of Englands response as well.
Personally, I think that a National Online Sales Tax won't happen since it will involve billions of dollars from online merchants and billions of dollars to regulated and enforce.
Major corporations that believe their "bottom lines" will be affect will most certainly lobby against such a measure. Especially since it has to do with interstate taxation.
The name is LEE!
<< <i>Government's solution to everything is MORE taxes.
It's never enough...kinda like pouring water down a rat's hole. >>
Laws for these taxes are already in existence, have been for decades. Internet buyers have been not reporting and paying them as required, so proposed legislation will require online sellers to collect them for the states. No different than a retail outlet collecting sales tax and then turning it over to the respective state. Problem with the internet application is that it requires a seller to deal with every state taxing authority he ships to. Not as simple as a Kmart store in Florida having to collect sales taxes on behalf of Florida only.
The simple solution would be to have online sellers collect and turn over taxes to only the state in which the seller is located. Its really no different than a retail store front selling in-state to an out-of-stater who either has the item then shipped out of state or takes possession at point of sale and transports the item out of state. If I live in Florida and purchase at a Kmart located in Georgia, I pay a Georgia sales tax at point of purchase. If online sellers are going to be forced to collect state sales taxes, this is the easiest way for them to do it; Just like store fornt retailers they will have to deal with only one state, their home state.
Imposing the proposed tax collection will involve complicated and expensive software and recording keeping needs (because of the state to state tax differences) for online sellers. Look for the developers of such software to be at the front of the lobbying effort for this change. Can't say that I blame the various states, expecially in these times of declining revenue, to want sales taxes that are currently required to be paid but are not getting paid to them.
Those that think they are too small to have to comply need remember that internet transactions are a walk in the park for investigators. Small time music downloaders thought they were too small to be bothered with. They were among the first to be transformed into "examples."
"Money does not care about speeches on morality. Capital asks whether the rules will remain the same tomorrow. With inflation, people assume price is the problem, and propose regulation—but price is simply the message." - Martin Armstrong
Ebay is only a sideline for me so I am just going to ignore any and all sales taxes and just refuse to deal with it. If some state 2000 miles away decides I was supposed to mail them a check for 32 cents what are they going to do about it?
If my state thinks I should collect taxes thats tough luck too. I'm not doing it . My state has sales tax on some items other items are exempt books yes , magazines no. Clothes sometimes , shoes maybe , coins who knows. Raw food no , cooked food sometimes , food that is served to you in a restaurant always .
If they want to make it a flat rate for everything that would be different . All the little exemptions were carved out by some lobbyist or crony there is no defensible reasoning for them that I can see.
I'm going to be a crony too and opt all my buyers out just because.
<< <i>State taxes are already collected..... the topic is a NATIONAL sales tax.... that would be Federal tax.... and that is not likely to happen for a long time. Congress has enough problems without adding something like this...plus, this would only serve to increase the growth of the already burgeoning black market. Oh, you did not know about that?? Wake up, lots of stuff available 'off the books'... Cheers RickO >>
The National Internet Sales Tax is not about collecting federal sales taxes. It is a national effort to implement new ways to collect individual state sales taxes on internet sales. Do further research.
"Money does not care about speeches on morality. Capital asks whether the rules will remain the same tomorrow. With inflation, people assume price is the problem, and propose regulation—but price is simply the message." - Martin Armstrong
I have not seen anything about a national sales tax being considered. Can you post a link or some source?
There is, however, a push to have states go after the sales tax that they lose from out-of state sales. It is promoted by Amazon, because they developed the software to make it work. States are looking at it favorably since it will increase their revenue. I think there is too much complacency in the electorate, too much divisiveness in the politics to fight against it. People will moan about it, but they will not vote for their own interest if it means crossing party lines. The politics has devolved so much that the people that make these decisions do not hear the people, only their lobbyists. Amazon is a powerful lobbyist.
<< <i>The simple solution would be to have online sellers collect and turn over taxes to only the state in which the seller is located. >>
Ding! Ding! Ding! I've brought this up many times with various groups and have never heard a compelling argument for why collecting tax for the seller's jurisdiction is not superior to the buyer's justification, except for one major issue. Each state (that collects them) would have to back off on use taxes for goods imported into the state. Because hardly anyone reports them common sense would dictate all the states getting together and dropping use taxes in exchange inter-state export taxes, but government and common sense...
Though states trying to get their hands on taxes for international sales could become and issue...
interesting to me that while something like this may be/have been in the works at the national/federal level, perhaps to go nowhere, individual states/cities/counties or whatever are passing local legislation
to exempt some/all of numismatics/bullion from sales tax with tons of variances/combinations. quite a few even with this status now.
how about a deep audit of current spending.
2 great ways to increase capital for a business/country. increase revenue/profit and more importantly, audit current expenditures.
.
- The Federal government is funded by income tax...
- States are funded by sales and income tax...
- Local governments are funded by sales and property taxes...
Now, since sales taxes have dropped significantly due to online sales, and it's safe to say the States requirements have not changed, this is simply a desire is to reclaim some of that income. It isn't a "new tax by those sleazy politicians"....it's just an attempt to fund the state governments, without raising income or property taxes. It's really a matter of "pick your poison".
It's an old story: New technology causes unforeseen issues, and require new ways to deal with them. (Example of others: Since highway funds come from gasoline taxes, watch them scramble as electric cars become more prevalent. They don't use gas....but the highways still need funding!)
I doubt coin sales will immediately end any more than it will be the end for sales of music, or computers, or anything else.
The key will be to do it "smart".....which is where "those sleazy politicians" will probably screw it up.
(Edited for tortured English....though I don't doubt some still exists.
That way the gov't can create more reasons to spend it.
As a HVAC business owner in Fla. I have to pay sales tax when I purchase items needed, also purchases from out of state are required to also pay sales tax to Fl.
<< <i>If it affects all sellers then the playing field will remain level and it will be passed on to the customer. Like other internet sales it will reduce the advantage of saving tax money by buying online. This will be a plus for the Brick and Mortar sellers. >>
When you buy from the brick and mortar store you are not paying for shipping like you do when buying from an internet dealer so the playing field is fairly level.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Just another effort by government to keep hands in our pockets with no beneficiary other than government itself
Hey Athena!
Welcome Back!!
The name is LEE!
For years, they've conducted business over the counter at coin shows where sales tax wasn't collected in the interest of expedient transactions. Millions upon millions have been sold with nary a nickel in tax being collected.
Now, all of a sudden, States are requiring the sales tax be collected and just as suddenly, that fella that was about to spend $10 for some Lincoln Cent goes all up in arms because he'll have to pay another 90 cents in Sales Taxes. I'm curious if the same whining occurs when folks purchase items from the drug store, toy store, auto parts store?
Prolly not but then folks have always paid sales taxes on that stuff.
As for a "National Sales Tax"? Slim chance that anything like this would pass Congress and it would HAVE to go thru Congress. We do currently have a Federal Sales Tax, so to speak. It's a Federal Excise Tax which governs certain federally funded projects such as Highway repair. In other words, we get something in return.
A general Federal Sales Tax would have to be for something in return. Otherwise, Congress would be very hesitant to approve it less they not get re-elected.
The name is LEE!