How is it possible for an Ohio dealer to stay afloat selling bullion??
keets
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I will assume that everyone remembers the "CoinGate Scandal" from around 2006, perpetrated by Tom Noe and defrauding the Ohio Bureau of Workers Compensation of millions of dollars with a "coin fund" scheme. The biggest fall-out of the whole thing was a Tax on coins implemented by the state.
That was repealed several years ago but has now been signed into Law again, effective this past October 1st. Included in the Law is the sale of bullion to be taxed at the state sales tax rate of 7%. Bullion sales are very competitive so they typically have a low premium, something around $1/oz. on Silver and maybe $30/oz. on Gold, with fractionals being even higher. If you do the math it's hard to see where a dealer can make money.
So I wonder, will bullion sales dry up in Ohio?
Al H.
Comments
Good question. I know I have recently stopped buying gold bullion type coins on eBay - the sales tax makes the cost prohibitive.
g
How is it possible for anyone in ANY business to stay afloat in 2019? I live in California. And I have a business. So I should know. But I don't. How is it possible? You tell me.
I'm quite certain that Ohio bullion dealers know the tax problem and work that info into their buy pricing. This may slowly kill them off too.
bob
Move the business to a tax friendly state.
You can live anywhere.
Easier said than done.
Size matters. The giants get handouts up the wazoo. Small guys supplement their incomes by catching tuna.
Agree.
There is zero need for them to work it into their buy pricing. It's on the sales side only.The sales tax is added to the sale price. What it does is decrease your ability to sell it because of the add-on. If you try to buy it 7% cheaper so that the total taxed sales price is unchanged, you then are incapable of buying any bullion so you have nothing to sell. On the sell side, the OH customers can SELL to an out of state dealer so any attempt to manipulate the buy side will fail.
NY State has been dealing with this forever on bullion sales under $1000. People do still buy bullion in small lots. They are nuts, but they do it. The volume of such sales is probably lower than it would otherwise be, so I think it would be hard (impossible?) as the OP suggests for a bullion only business to exist in a state with a 7% tax rate on all bullion sales. In fact, given the internet sales tax, it is also impossible for someone to buy bullion at all in such a state with any kind of efficiency.
Except you then can't buy it ANYWHERE, not just eBay, if your state taxes such items.
LOL. Ouch.
I assume coin/bullion dealers in high tax states stay afloat by doing most of their business with out of state mail order customers. Here in Florida there is no sales tax on legal tender US coins and bullion over $500.
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
Find alternative sources to buy bullion.....
They are available....Cheers, RickO
I'm quite certain that Ohio bullion dealers know the tax problem and work that info into their buy pricing. This may slowly kill them off too.
the killer is the stagnant market.
let's look at the economics involved only with Silver and understand that it isn't the buyer's responsibility to pay the sales tax, it's the sellers responsibility to collect and pay it to the State. right now Silver is at $17.50, so even if a dealer was able to buy at spot and sell at the typical pre-tax premium of spot + $1 it's a losing proposition. that 7% sales tax makes the price $17.50 + $1 + $1.22 = $19.72/oz. if he obeys the law. nobody in their right mind will pay that. that leaves three alternatives: figure out some way to buy lower, cook the books or quit selling.
personally, I think our Ohio Legislators got it wrong, they think they figured out a way to generate income but are really hurting small businesses. this policy failed once after "CoinGate" so it is hard to imagine why they believe it will work now. the long term affect of the last one is that CSNS left and has never been back, any hope of the ANA having a show in Ohio is a fantasy. the only Numismatic organization I know of that still comes to Ohio is the EAC.
I wouldn't assume that, necessarily. Big entities like Apmex do it. But just the cost of shipping, risk management etc. significantly increase the cost. Typically, bid/ask spread on an ounce of gold is about $50. How are you going to promote, process payments, ship and insure and still have it be worth the time?
It's a huge problem if you want physical bullion. It becomes much more cost effective to trade ETFs and silver futures on paper.
.> @Hydrant said:
Size matters. The giants get handouts up the wazoo. Small guys supplement their incomes by catching tuna.
Hydrant compliments me, I think
Conistarled trys to to by funny
Jm think its true and say ouch , LOL OMG
Thanks guys for the free press, I really appreciate it.
Definitely helps the bottom line 
FYI I lose quite a bit of money chasing Tuna. My business is so successful that I am able to take time off and spend hard cold cash for these fantastic trips out in the open Pacific Ocean breathing in the fresh ocean air, it so bitchin !!!!
I said "ouch". Where did I say it was true?
I do not own a business but given the OP's bullion scenario, it sounds like it's a situation ripe for collusion.
"If I say something in the woods and my wife isn't there to hear it.....am I still wrong?"
My Washington Quarter Registry set...in progress
BST!
When I was in India, the common gold is in jewelry form at 22K. It was sold at spot by total weight, and bought at spot for actual gold weight. So it was around an 8.40% spread.
That was "Normal".