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Coin Dealers become big losers in Ohio
mrearlygold
Posts: 17,858 ✭✭✭
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
0
mrearlygold
Posts: 17,858 ✭✭✭
mrearlygold
Posts: 17,858 ✭✭✭
mrearlygold
Posts: 17,858 ✭✭✭
Comments
Does anyone buy this?
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>"This is one of the biggest scandals this state has ever faced," >>
Give me a break!! It's a $12-18 Billion Fund. This coin thing is getting blown way out of proportion
I suppose I subscribe to the theory that any press is good press. Its certainly interesting press and I think if the Toledo Blade did a more mainstream story about rare coins, not one linked to corruption, it might actually have a positive effect on the hobby in general.
TPN
Are there any big shows that may stay clear of Ohio now?
State officials are quoted as saying they expect to raise millions in revenue for the State. I hope someone keeps track of how much they REALLY end up collecting in revenue -- and compare that amount to how many coin businesses close (or at least layoff personnel) to see just how brilliant this idea is.
Partner / Executive VP
Heritage Auctions
5.5% is a large chunk on a large purchase.....
I would buy even more material (Bullion type coins like ASE & Maple Leafs) over the internet then I already do, as it would be cheaper.....
If the proposed Ohio tax works like other sales taxes, it will not apply to sales shipped out of state.
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>This would piss me off quite a bit, as I live in Ohio.....
5.5% is a large chunk on a large purchase.....
I would buy even more material (Bullion type coins like ASE & Maple Leafs) over the internet then I already do, as it would be cheaper..... >>
Even then you might be subject to a use tax on out of state purchases, which you report on your state income tax form. However, most states do not aggressively enforce the use tax on individuals ---- yet!
Thankfully, my state (Conn) has kept their paws off coins, and should continue to do so if they ever want the ANA to use their shiny new convention center in Hartford!!
and it sets us apart from practitioners and consultants. Gregor
It's a 14 Billion dollar fund for God's sake---it goes up and down 10 million in value every hour--Who cares!!!Grow up OHIO!!!
roadrunner
<< <i>Give me a break!! It's a $12-18 Billion Fund. This coin thing is getting blown way out of proportion >>
Ya, but $10 million here and $10 million there and pretty soon it adds up to some real money
On the other hand, running off with $10M in taxpayer money (if that is indeed what occured here) is another thing entirely.
<< <i>On the other hand, running off with $10M in taxpayer money (if that is indeed what occured here) is another thing entirely. >>
And the state will spend $15 million investigating where that $10 million dollars went.
He is useless unless you like having EVERYTHING increase in price.
<< <i>On the other hand, running off with $10M in taxpayer money (if that is indeed what occured here) is another thing entirely. >>
Yes that is bad and people should be prosecuted for their wrong doings. It's just so typical for the politicians to over react and over legislate to make themselves look good.
The democrats and the toledo blade would love to see this turn out as badly as possible.
If I am the same Michigan dealer setup in Ohio, and sell to a non-Ohio resident, do I still collect the tax?
My bet is if you are in the great state of Ohio, you will collect the tax - no exceptions.
I suspect most of the out of state dealers will now avoid Ohio shows because of the hassle.
I also suspect that I will see more Ohio dealers at shows in Michigan.
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
My digital cameo album 1950-64 Cameos - take a look!
Here's a novel idea, how about personal accountability from ALL involved parties including asset confiscation our dear governments like to use and leave the laws and taxes in the great state of Ohio as is.
Another stake in the hearts of Ohio coin dealers and collectors, God help us as we can surely see our politicians aren't!
Let em' eat coins, oh wait that was cake.
Dave
Granted, a key figure in both issues is Tom Noe. But this is just partisan politics using the "scandal" to attack ALL coin dealers and collector-investors. As I stated before, there are some class act dealers and collectors in Ohio who did nothing wrong -- and now their own Legislature is going to annihilate an otherwise healthy in-state industry.
CAMEONUT: If you are attending a trade show in Ohio, then you would be subject to Ohio laws. Even if you are a MI dealer and sell a coin to a collector from NY, if the sale takes place while on Ohio soil, then you're required to collect any taxes due. Obviously, there are tons of ways to effectively avoid the tax -- but not legally. States immediately surrounding OH will benefit most.
Partner / Executive VP
Heritage Auctions
I've been a dealer in NY for 26 years......We've always had a sales tax on coins, and it's 8 1/4% besides.......You think I pity an Ohio dealer that has to collect 5 1/2%......I doubt it. This isn't news.....
Paul
How much profit do you make selling $10,000 worth of gold Eagles to a local investor? 1% to 3% would be my guess. Do you think its fair that the State of NY makes 3x your profit? Do you think its fair that the investor now has to wait until gold spot increases nearly 10% before he's covered the taxation and is in a breakeven position?
Partner / Executive VP
Heritage Auctions
Ask the numerous coin shop owners in Fla who simply went out of business for similar reasons.
Or the rest who had to pay thru the nose just in order to stay in business here. How many were planning an exit because of it.
Yes, it is a big deal Beav.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
to be honest, i don't really see anything wrong with taxing coin sales. it only seems bad since there is currently no tax. the whole Fund Scandal is a bit absurd in the ways it's probably gonna affect the hobby. the last thing anything needs is political involvement and scrutiny. the fact that Ohio has lost so much of it's heavy industry and manufacturing base in the last 30-40 years doesn't allow much choice for legislators when it comes to raising money and it seems coins are on the hit list.
thanks for the heads up.
Al, despite my overall anti-tax stance, I generally agree with you, especially while wearing my collector hat. On the rare occasion that I don my investor cap, it makes no sense whatsoever to tax coins. Are coins more like stocks or baseball cards? --that is the question.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
baseball cards, easily.
baseball cards, easily.
I 80% agree, 20% disagree. At any rate, the article in CW suggested that the proposed law change has little chance of passing--might be enough to scare the CSNS away from your state (and back to my state
After all, it's for the common good right comrade?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
"Only little people pay taxes." Leona Helmsley
CG
No one hates taxes more than me...but coins are goods and a tax on goods is not the same as a tax on one's professional services IMO. And my profession is chock full of regulations and fees and insurance to the point of absurdity, such that it would make a sales tax on coins look like a proverbial "f@rt in a windstorm."
Don't get me wrong, I am not in favor of a tax on coins. As a collector, intellectually, it is hard to argue against it.
So I can no longer sell my collection to my local Ohio dealer without collecting sales tax from him?
That would be weird, and I have no i-dee what forms I'd have to fill out.
IN YOUR OPINION are the key words aren't they.
That's why we used to have a Constitution. As in law of the land. To prevent that from infringing on other peoples life, liberty blah blah blah and blah.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
On the other hand, taxation with representation sucks too.
CG
<< <i>Given the choice between a raise in my income tax or applying sales tax to coins, both bringing the same revenue to the state, I would pick the tax on coins. I would prefer the government stop wasting my money, but that does not appear to be one of the choices.
Well first of all you don't have a choice. Guess what? They're going to do whatever THEY want.
And the need for higher and higher revenues is not going to stop or even slow down, in fact it's going to increase and accelerate. As such I started this thread the way I did because thats exactly what this is, an excuse to stick it to whoever they can stick it to.
While actually getting some folks you say "I'd rather", or "I can almost justify" or some other sort of lap doggy way of saying, ok, but please don't touch ME.
That's what we get when we allow ( ed) this all to start.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
The Ludlow Brilliant Collection (1938-64)
The Toledo Blade is a liberal paper going after a Republican because it is the only way they can make themselves feel better after Bush won reelection, winning Ohio, despite the left tossing everything they could against him.....
It is no question that Taft is a boob, but he is a super genenous compared to the retarted demorats that are running Cleveland into the ground faster the speed of light.....
Well, then, let's overthrow the government...or at least move to Canada. They don't pay tax there, do they? Or buy an island somewhere in the South Pacific and live like Tom Hanks did in Cast Away. That way the government won't be able to get to us and our coins. Is that better?
<< <i>Well first of all you don't have a choice. Guess what? They're going to do whatever THEY want.
Well, then, let's overthrow the government...or at least move to Canada. They don't pay tax there, do they? Or buy an island somewhere in the South Pacific and live like Tom Hanks did in Cast Away. That way the government won't be able to get to us and our coins. Is that better?
Nah, better off to hope someone else "gets" it.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Sorry, I am obviously not smart enough to get it.
While actually getting some folks you say "I'd rather", or "I can almost justify" or some other sort of lap doggy way of saying, ok, but please don't touch ME.
Perhaps part of my "not getting it" is that this whole thread started as a pity party for coin dealers in Ohio as their self-interests would be affected (ie. "please don't touch me").
I will repeat: I am not for raising any taxes, I have voted against every tax increase that I have had the opportunity to vote against, and I have voted against every candidate with a pro-tax platform, including my own state rep who is proposing a special state income tax on individuals who earn more than $200,000 annually. If we have to be taxed, which in order to support roads, police, military, a lot of government workers who do nothing, and a lot of lazy citizens who have done nothing and continue to do nothing, I would rather see it done on the consumption side rather than the income side.
It is not a pity parts for Ohio dealers, it is something that affects all of us on this page as more and more states get the idea that numismatic material is something else that can be taxed it will end up being in all states real quick.....
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Thanks, Dave
URGENT ALL OHIO DEALERS
ALL dealers MUST send letters to the leadership of the OH senate and house of representatives urging them to OPPOSE HB 275 -- repeal of the OH state sales tax on coins & bullion. YOU NEED TO SEND MESSAGES VIA FAX, PHONE CALL, OR EMAIL IMMEDIATELY.
OH dealers should emphasize that it’s consumers who will pay the tax, not dealers. Consumers will take their business out of state. The exemption brings business INTO Ohio and is revenue POSITIVE. Repeal will mean a loss of revenue for the state.
Non-Ohio dealers should emphasize that they will not attend shows in OH because of the sales tax. Sales tax exemptions are good for consumers, good for business, and good for state revenues.
THE BILL CONTAINING THIS REPEAL WILL GO TO VOTE EITHER TODAY OR TOMORROW – THIS IS URGENT THAT MANY, MANY DEALERS SEND COMMENTS. PLEASE SEND TO:
District37@ohr.state.oh.us
District01@ohr.state.oh.us
District80@ohr.state.oh.us
District27@ohr.state.oh.us
District16@ohr.state.oh.us
District73@ohr.state.oh.us
ALSO CONTACT YOUR SENATORS AND REPRESENTATIVE DIRECTLY. YOU CAN FIND THESE BY GOING TO WWW.LEGISLATURE.STATE.OH.US.
We have also gone on the teletype asking OH and non-OH dealers to send messages. This Sales Tax Exemption is lost if you don’t take action. I have attached a sample letter you can use for talking points. Call me if you have questions. Eloise
Eloise A. Ullman, Executive Director
Industry Council for Tangible Assets (ICTA), Inc.
PO Box 1365, Severna Park, MD 21146-8365
Telephone: 410-626-7005 Fax: 410-626-7007
Web: www.ictaonline.org Email: Eloise.Ullman@ictaonline.org
Todd
800.954.0270
******************************
California Appellate Court Affirms Borders Decision, Finding Nexus on Sales by Online Bookseller
A California appellate court recently held that an online bookseller with an in-state bricks-and-mortar retail affiliate had California nexus and was required to collect use tax on sales to California customers. Borders Online LLC v. State Board of Equalization, A105488 (Ct. of App. 1st Dist. May 31, 2005).
Background
The appellate court’s decision affirms a State Board of Equalization (SBE) ruling and subsequent trial court’s grant of summary judgment that the online bookseller was engaged in business in California based on the retail affiliate’s practice of accepting returns of merchandise purchased from the online seller. SC OHA 97-638364 56270 (Cal. St. Bd. of Eqal. 2001).
Under Cal. Rev. & Tax. Code § 6203, a retailer engaged in business in California is defined to include a retailer having a representative, agent, or similar person in the state for the purpose of selling tangible personal property. The SBE and trial court both found that the retail affiliate was acting as the online seller’s agent by accepting returns of online purchases, and that accepting purchase returns constituted selling—under Cal. Rev. & Tax. Code § 6203—because it was an integral part of the selling process.
While the decision turned in large part on the return policy, there were other relevant facts both favorable and unfavorable to the taxpayer. In addition to accepting returns of online purchases:
The retail affiliate’s sales receipts listed the online seller’s web address
Retail sales associates referred customers to the Web site
There were common officers, directors, and logos
At the same time, other facts appeared to support the online seller’s contention that the retail affiliate’s actions were not sufficient to establish that it was doing business in California. For example, the retail affiliate accepted returns of merchandise without a receipt if it carried the product (i.e., this policy allowed customers to return products purchased from competitors to Borders). Furthermore, the retail affiliate did not send returned merchandise back to the online seller or charge for returns; it merely placed the returned merchandise into its own inventory.
Statutory Analysis – Engaged in Business
On appeal, the court found that the retail affiliate was an agent of the online seller. The appellate court rejected the seller’s argument that the following four-part test must be satisfied to establish an agency relationship:
Power to bind
Agent acting as a fiduciary
Control by parent
Consent by agent
The court explained that while such a test may be indicative of an agency relationship, it was not a bright-line test required to establish agency under California law.
Rather, the court found that the retail affiliate became the online seller’s agent through “ratification”—that its action of accepting returns ratified the online seller’s policy that the retailer accept such returns.
KPMG Observation
The court did not address the fact that the retail affiliate could accept returns of products purchased at other stores. The court’s interpretation allows a broad application of agency concepts in the sales and use tax context.
Moreover, the court agreed with the SBE’s interpretation that the term, “selling”—which is not statutorily defined—should include activities integral to the selling process.
The court concluded that, since the return policy made online sales more attractive to customers, it was integral to the selling process. While the court rejected the online seller’s attempt to shift the burden to the SBE to demonstrate that the return policy actually impacted sales, it did indicate that the online seller may have benefited by presenting evidence to the contrary.
Constitutional Analysis – Substantial Nexus
The court also held that imposition of use tax on the online seller did not violate the Commerce Clause of the U.S. Constitution. The decision focused on whether the retail affiliate’s actions satisfied the Scripto/Tyler Pipe standard, under which an in-state actor may establish nexus for an out-of-state person if his actions are significantly associated with the taxpayer’s ability to establish and maintain a market in the state for sales of its products. Scripto v. Carson, 362 U.S. 207 (1960); Tyler Pipe Industries v. Dept. of Revenue, 483 U.S. 232 (1987).
The court rejected, as too narrow, the online seller’s interpretation of Scripto/Tyler Pipe as only having been satisfied if the retail affiliate actually made sales of the online seller’s products in the state. Instead, the court cited numerous decisions in which activities other than sales were found to establish nexus for an out-of-state entity. However, the court failed to acknowledge that most of these decisions involved a presence by the actual taxpayer, rather than an affiliate, agent, or some other attributional contact. The decisions cited by the court included:
Standard Pressed Steel Co. v. Washington, 419 U.S. 560 (1975) (employee consulting)
Town Crier, Inc. v. Department of Revenue, 733 N.E.2d 780 (Ill. Ct. App. 2000) (installation and delivery in own vehicles)
Dept. of Revenue v. Care Computer Systems, 4 P.3d 469 (Ariz. Ct. App. 2000) (employee in state to conduct training)
The court failed to distinguish these decisions from the situation in which nexus is more tenuous because the in-state actions are conducted by a person other than the taxpayer. The court relied heavily on Orvis Co. v. Tax Tribunal, 86 N.Y.2d 165 (1995). While the court did not explicitly adopt the broad “demonstrably more than a slightest presence” nexus standard articulated in that decision, it did state that it believed the Orvis standard was more in keeping with the realities of 21st century marketing and technology.
The court then applied the Scripto/Tyler Pipe standard to the taxpayer, finding that the return acceptance policy was part of an effort to build (i.e., establish and maintain) a California market, and the fact that the online seller had $1.5 million of California sales during an 18-month period was evidence that the return policy was significantly associated with this effort.
The court did not point to any evidence correlating the sales revenue to the return policy. Rather, the court admonished the taxpayer for seeking to claim that merchandise returns were de minimis without providing any evidence to that effect, itself. The court distinguished SFA Folio Collections, Inc. v. Tracy, 652 N.E.2d 693 (Ohio 1995), which held that a mail order seller could not be required to collect use tax based on the in-state presence of a retail affiliate that accepted returns of remote sales. The court stated that the return policy at issue in SFA Folio was set by the retailer—rather than by the remote seller.
KPMG Observation
Such distinction seems somewhat arbitrary because, in the SFA Folio and Borders cases, the entities were commonly controlled.
KPMG Observation
While the Borders decision largely affirms the position previously taken by the SBE in both the underlying Borders ruling, and in BarnesandNoble.com OHB 97-732835 (Cal. St. Bd. Of Eqal. 2002), this position will be bolstered now that it has been upheld in a precedential appellate court decision.
Moreover, certain aspects of the court’s rationale could significantly affect the assertion of attributional nexus positions in California, specifically:
The court’s broad interpretation of agency principles
Its adoption of the SBE’s broad interpretation of “selling” to include activities integral to the selling process
Its apparent preference for the Orvis “demonstrably more than a slightest presence standard”
At the same time, note that the taxpayer failed to provide much evidence in its defense, due largely to the fact that it did not track such activities as the number of actual online sales returned to California retail stores. The decision, thus, reinforces the importance of documentation in such matters.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
And so now they "have " to find more and more creative ways of ripping us off. What's really humorous is when people say "what a stupid law", or "they don't know what they're doing" when in my opinion, they know exactly what they are doing as you don't see them EVER losing power do you? Or am I wrong and does anyone actually see a return to a freer state of the country and I'm just missing it?
Rare Coins have a degree of privacy that every statist in government would LOVE to devise a way to track, monitor and tax. The business is one of if not the last bastion of free enterprise that exists in this country and one of the unspoken crimes thats going on here is the integration of the government in this great hobby/investment and now the alleged crimes that are attached to that integration that is absolutely giving the statists in Ohio the "excuse" to come up with a way to tax everyone ( steal ), under another guise of protecting the public.
I'm not missing it.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870