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<p>[QUOTE=&quot;calcol, post: 2465334, member: 77639&quot;]First, this post may not be what you hoped, but it&#039;ll be in the right direction.&nbsp; I live in California, and as many are aware, the state charges sales tax on coin purchases under $1500.&nbsp; Supposedly it&#039;s because $1500 is an investment and under that amount is just play.&nbsp; Of course, if a coin bought for $1000 is later sold for $1450, you&#039;re supposed to pay income tax on the gain.&nbsp; If you&#039;re a dealer (have a resale license), then no sales tax, but the income tax situation on any gain may be different.</p><p><br /></p><p>The $1500 barrier refers to a single invoice that can have multiple coins on it.&nbsp; So, if you&#039;re bidding in an auction, and the total (bid plus premium) is getting close to $1500, try real hard to find a coin in the remaining lots that will bring the total to the magic mark or over it.</p><p><br /></p><p>The state tax rate is 7.5%, but many (most?) local governments have their own sales tax too. The average in large metro areas is close to 9% total, so I&#039;ll use that figure. </p><p><br /></p><p>For example, if the first coin is $1300 total, then the tax is 0.09 x 1300 = 117.&nbsp; So, if you can find another coin that you can get for $200 total, then the net cost is $83 (i.e. = 200 - 117) because you&#039;ll pay no sales tax on the pair.&nbsp; I try to have less expensive coins that appear later in the auction pre-picked if I think I may be getting close to $1500.</p><p><br /></p><p>For example, in an auction, I &quot;won&quot; a proof 2-cent piece for about $1400. I was facing a tax bill of&nbsp; 0.09 x 1400 = $126. Although I don&#039;t collect half-cents, I thought it would be fun to have a nice example.&nbsp; So, I was able to bid on one later in the auction and got an 1851 MS62BN (NGC) for $262 total.&nbsp; But since there was no tax on the pair, the real cost of the second coin was 262&nbsp; - 126 = 136.&nbsp; I&#039;m now a happy half-cent collector with only one example!</p><p><br /></p><p>This strategy can be used with dealers too, and I&#039;ve seen savvy dealers point it out to potential buyers.&nbsp; With a dealer, you can take your time.&nbsp; At a show, it might be possible to have two dealers put multiple coins from the two of them on an invoice from one of them.&nbsp; One dealer sells the coins to the other, who then sells those coins plus some others to you. With an auction, the lots move quickly, and you must be ready and nimble. </p><p><br /></p><p>There are other strategies for beating the CA sales tax, like buying over the internet from a dealer or eBay seller with no physical presence in the state.&nbsp; In theory, you&#039;re supposed to send the state the sales tax yourself.&nbsp; I wonder if anyone does.&nbsp; All the major auction companies have a physical presence in CA, so they charge sales tax.</p><p><br /></p><p>Cal[/QUOTE]</p><p><br /></p>

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