California sales-tax-exempt limit went up this year

Effective Jan 1 this year, the exempt limit went from $1,500 to $2,000. Applicable legal code is below. Has anyone experienced sales tax being collected on a purchase between $1,500 to $2,000? Could come as a shock to CA residents buying a coin in that range if they aren’t aware. Tax will be at least 8%. I think it’s a unfair law … taxes the poor, but not the rich. Supposed reasoning is that lower cost collectibles are a hobby, but higher cost are investments. It stinks!

Cal
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Neither the sales tax nor the use tax applies to sales of "monetized bullion," nonmonetized gold or silver bullion, and numismatic coins provided the following conditions are met:

(A) The sale is in bulk amount. For sales occurring on or before December 31, 2008, a sale in bulk occurs if the total market value of the monetized bullion, nonmonetized gold or silver bullion, and numismatic coins sold in a single transaction is $1,000 or more.

For sales occurring on or after January 1, 2009, and before January 1, 2023, a sale in bulk occurs if the total market value of the monetized bullion, nonmonetized gold or silver bullion, and numismatic coins sold in a single transaction is $1,500 or more.

For sales occurring on or after January 1, 2023, a sale in bulk occurs if the total market value of the monetized bullion, nonmonetized gold or silver bullion, and numismatic coins sold in a single transaction is $2,000 or more, or is equal to or exceeds the adjusted amount as computed by Revenue and Taxation Code Section 6355. For purposes of this regulation, market value means sales price as defined in Revenue and Taxation Code Section 6011.

 

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Be interesting to see income demographics on the folks who lobbied and voted on this legislation, wouldn't it?

 

Yet a lot of the major coin clubs and auction houses are in CA. You mean there is an 8% additional buyers' fee (tax) on coins <$2,000 ?

 

Yup. But it's if the buyer lives in CA. Doesn't matter where the seller is as long as they are in the US. If the seller is in the US and the buyer is in CA, seller is supposed to charge sales tax and send it to the CA tax board. And most large dealers and auction houses (including eBay) do it.

If the seller is in another country and the buyer is in CA, the buyer is supposed to send the sales tax to CA tax board. Or you can wait until income tax time, and there's a space on the form to pay sales tax you owe. Yeah, right ... I'm sure most buyers do that.

CA charges sales tax on any buyer's fee and shipping and handling fees too.

Cal

 

And people wonder why California is loosing people to other states.

 

Thanks for the info. Guess California based will be in my bypass list. Problem is I think Great Collections is based in California.

 

You don’t live in California do you shouldn’t have any problems. I buy from 2 dealers in California and I have no problems and I pay no tax.

 

Great Collections, Stack's Bowers, eBay and PCGS are all in California. But if you're located in another state and doing a deal with a California business, sales tax is dependent on where you live. Living in CA is expensive, especially housing and taxes.

Cal

 

Good! California is back on my good list, but will never live there.

 

I thought Californians only bought $50 gold pieces and stuff like that? These coins should easily be well over the measly $2K limit for you guys. Thus what's the problem?

 

No problems, just concerns sometimes.

 

I feel the same.

 

At least yoy have that out if you live in CA. Here in the people's republic of MN they went the other direction, enacting the highest capital gains rate in the US on everything this last year. I am renting the Uhaul before I give notice of retirement in the future. I am out of this state as soon as my job is not keeping me here. Midwestern weather but CA taxes.

 

I don't suppose you know of a spot with the opposite arrangement? Asking for a friend...

 

Nothing like CA weather but parts of Chile or Europe, but many states like SC, FL, TX, etc with warmer weather and no taxes for retirees. Heck, even IA and SD has similar weather and no taxes on retirees. I just can't believe this frozen state has the nerve to have one of the highest tax rates in the US. At least with CA taxes you get nice weather...

 

As one of the few native Californians I'd say not enough people are leaving our state. We are overpopulated with people who migrated here from other states and countries. The big advantage for people selling their expensive homes in California and leaving, is homes are so cheap in other states.

 

If the state you live in charges sales tax on coins, the California dealer is still supposed to charge your states sales tax and forward it to your state. And in that case I don't believe you get the tax cut off at $2,000. You buy $3,000 in coins you pay taxes on the whole $3,000.

 

There are other options for your displeasure, as just moving, but whenever I leave my enclosed facility to go elsewhere, I really miss the positives of my rural home!

I will admit loving the trike drives on rural paved WI roads, but watching the Eagles fly over the river, and other natural amenities as abundant wild fruit, flowers, creatures, over-rides the Liberal government control.

JMHO

 

South Dakota vs Wayfair, 2018, is the relevant Supreme Court decision. If you’re a U.S. citizen buying from a dealer in the U.S. and the sale is across state lines, the dealer is supposed to collect sales tax appropriate to your state of residence (not the dealer’s state of residence) and forward the funds to the tax authority in your state of residence. If the sale occurs within a state, that state’s laws apply, and any tax collected is forwarded to that state’s tax authority.

I remember talking to Ian Russell, co-owner of Great Collections, about the Wayfair decision when it was pending. He estimated it would cost GC at least $75k per year in administrative costs to comply.

If we’re going to have sales tax, the Wayfair decision was a good one because it levels the field for in-state and out-of-state sales. However, the administrative costs to business could be lessened by having a national sales tax clearing authority (funded by the taxes collected!). That way a business doing out-of-state sales would need to deal with only one out-of-state tax entity instead of dozens.

Cal