I just happened to notice this article on Kitco.com, and I figured it would be an interesting/informative read for some of those who may be affected eventually by this: http://www.kitco.com/reports/KitcoNews20120210AS_focus.html "Coin Community Fears Damage From Repeal Of Sales-Tax Exemptions; Maryland Current Battleground" is the title of the article. (it may be old news for some, but I found it surprising. I apologize if this is one of those "already been discussed" topics )
as in the article it will just drive business to nearby states with a better tax policy. some states have repealed taxon PMs others have minimum buy thresholds. it depends on how the state finances are doing. so fer the trend is split on the PMs and tax issue.
Good article. It's 50/50 here in Cali, some dealers charge tax, some don't. The guys imposing sales tax usually has better inventory. So there's the trade off.
In Texas, the threshold is $1,000. That's a bit high for me, especially since I focus on silver. Lately, it's hard to make a gold transaction under the threshold though.
California's law is here http://www.boe.ca.gov/meetings/pdf/N3_082311_Rev_Taxation_Code_Sec_6355.pdf and basically says that purchases of $1500 ( was 1000 before )or more at one time of bullion or numismatic coins is exempt of state taxes. $1499 or less you owe the tax and sellers should collect it, or they could be in severe problems. It is true that many dealers at shows or such do not collect sales tax on small amounts, but they still pay it on their own out of the profits. There are times when the state will send tax agents into shows to see if tax is being collected when appropriate. Some counties/cities also check for business licenses of sellers.
It matters but from a true legal standpoint it really doesn't matter. The buyer still owes the tax in their home state anyway.
Alot may just depend on who rings you up in a coin store. At one coin store I've been to, only one particular employee will charge you tax. I heard him say one time to someone, "We have to charge tax if the sale is under such and such amount." I got a surprise when I bought a used coin tube for 25 cents and this particular employee rang it up as 27 cents. It is quite irritating to have to dig for pennies or use another coin. Last time I just had a quarter out and handed it to him without him going to the register. He said thank you and I went about on my way. I am of the mindset that coins and supplies should be exempt from tax anyways but perhaps that is because I am used to not being charged tax on them to begin with.
Actually its illegal for them to pay the sales tax out of their profits. The sales tax is a tax on consumers, not businesses, and specifically listed as illegal for the seller to pay it instead of the buyer. Also, due to Use tax concerns, a seller should not do this anyway since the buyer would not know whether he owed Use tax or not. CA is not bad, except for their provision that is you sell in the state, (and am an out of state dealer), so many days a year they legally have to register with the state and collect sales taxes. This number is so low it prevents many dealers from going to shows there very often. I have heard other dealers say that since they go to Long Beach they cannot attend any other CA show due to being forced to register.
A tax related issue--a Northeast dealer had his bank account frozen after doing some Texas shows; he had filed initially but did not make enough on his last show to file. It was unfrozen after the misunderstanding was cleared up. Another new tax issue is that the IRS is getting a lot more records these days of pay pal and other online transactions; they are busy beavers trying to close the budget gaps: http://www.nytimes.com/2012/02/12/b...rice.html?_r=1&scp=1&sq=tax non filers&st=cse
How about those commercials I periodically see on the TV where a furniture store or whatever will pay your sales tax? I am far from an expert on taxes but isn't this the same thing?
If you notice, they state that they will "pay them" by giving you a deduction in the amount of the taxes due. Its a fine line they walk. There is a whole slew of reasoning why it was determined it had to be illegal for companies to pay the sales tax themselves, interesting reading for those interested in tax policy. The interesting thing, though, is every state came to the same conclusion and has the fact the CONSUMER has to pay them as a cornerstone of their Sales and Use tax law. The bottom line is a company can, "pay your taxes" by giving you a discount equal to them, (just a bit of salesman puffery or a novel way for them to give a discount to sell goods), but its illegal to not itemize sales tax on your invoice, (for them to simply remit the tax themselves).
Yes sir you are correct. For the past decade the primary focus of the IRS has been the "tax gap" (the difference between theoretical taxes that should be collected and those actually collected), and how to close it. They are actively looking at any data source possible to close this gap and force higher compliance. Of the areas identified, non-reporting of business profits from sales is listed as the highest reason, with profits from non-dealers of items also being listed. Therefor, if I were the IRS I would be pursuing Paypal aggressively as well, as that data will give them 100 million questions to ask to see if people are reporting income correctly. Closing the tax gap was also the motivator for the now repealed law forcing reporting of purchases on a 1099. Trust me, when the government starts having trouble borrowing they will reinstate this law. Think about all of the people buying and selling for cash at a coin show, and how profits from these sales probably are not being reported and paid taxes on. There is a lot of money to be raised if all purchases had to be reported to the IRS, and the government knows that.
"The I.R.S. investigates about a million “nonfiler situations” a year, Mr. Burke said. But it does not prepare a substitute return for everyone that it believes failed to file. People in the underground economy do not leave a trail that can contribute to such a return, tax experts said. If those people are caught, they may not get an official printout in the mail. A visit from someone who dangles handcuffs from a belt is more likely." Last I heard, about 30% of citizens are non-filers. Like I said, they are busy beavers and the burden is on the taxpayer not revenue services.
