Heritage tax on coins in Ohio - very disappointing

You always owed use tax equivalent to the sales tax if the seller didn’t collect it.

Heritage merely is now doing this for you. Protecting you against your self.

Initially it appears that it was based on the expanded list of subsidiaries. As more and more states enact external (no nexus) sales tax laws, the jurisdictions where auction houses will collect tax will expand.

 

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I'm in Ohio, too, so I visited the Ohio Department of Taxation page

15. What sales are exempt/excepted from sales tax?

• Sales of investment metal bullion and investment coins. (Effective January 1, 2017)

39. What is an “investment coin”?

• An investment coin means any coin composed primarily (more than 50%) of gold, silver, platinum, or palladium.

For more detail, here's the actual law, as written (paragraph 54 is of interest to us)

 

Thanks for posting this. I was posting with my phone in a meeting, so couldn't get this level of information in the thread.

Heritage appears to be splitting hairs in an effort to err on the side of caution.

The OP's coin may meet the definition of a exempted coin as defined by Heritage, but that's not Heritage's call, it's the State of Ohio's call. Maybe it being an ancient the amount of silver is not verifiable? That may be what Heritage is hanging it's hat on.

I'd push on Heritage.

 

I just got off the phone with Heritage and they said that Ohio specifically identified Heritage and Stacks Bowers as companies who sell collectable coins so ALL coins sold by heritage will be subject to tax regardless of metal content. I pushed pretty hard and that was the answer I got. Additionally, they would not tell me what states charge taxes to even try to get past this stupid problem.

 

Well, I don't purchase from Heritage. Too little of a collector for that. But for me, I have been occasionally to shows in various states and sometimes have purchased a coin or two. Only thing this might do is make me wary of going to a coin show in that state, as if I can essentially get a coin I like without tax, darn if I will want to pay an obligatory one. You are right, Bambam, at least for the small future, it will keep some of the little guys away. But just like now, basically forty years on from the last time one could count on a float of a few or several days (known as kiting a check) before your check would hit your bank and withdraw funds, a few years or a couple decades down the line, it will be much in the past as far as being able to skip out on sales tax online.

 

I know it will keep me away from heritage and stacks Bowers for the time being until they come to a rational agreement with the state of ohio. I may bid but will lose since I have to factor the tax into my bids now... as i said in the title, very disappointing.

 

Did they mention what they base the state off? My previous post mentions ways around it other than being based on the shipping address. I am rather curious.

 

You can add Wisconsin to the list of states taxing coin sales.

 

They base it on the shipping address. Was going to send it to my brother in Michigan but they said they tax it there too, unless they were lying to me.

 

Ancients could have been your issue there.

 

Nope, I called and talked to them twice and they said "Any and all coins sold by Heritage"

 

The whole taxation issue is incredibly complex. And the fines huge, as much as $250K.

Companies are going to take shortcuts and err on the side of collecting and remitting too much.

If you want you can probably file some form with your state for the overages. But that's on you and your time... not theirs

 

Seems pretty simple to me for the state of ohio, in that they are trying to enforce something different than their own wording in their own tax code...

I understand the rub with Heritage and why they are charging taxes to err on the side of caution, but that doesnt mean I have to like it and can't vent about it.

 

Going back to my example of Stack’s collecting a 9.5 percent Louisiana sales tax on an invoice of less than $1,000.

It seems that taxing collectibles like this won’t bring in the state enough money to make it worth its while.

But no one here that I know of ever accused the Legislature of having enough sense to get out of a rain shower.

 

It's not always about the specific amount of a single collection.

Years ago Fortuneoff (jewelry watches silverware) finally got a NJ court to allow it to subpoena for purchases made "tax free" by NY residents shipped to NJ addresses.

A simple check of property tax records showed it wasn't their residence and they got a bill. Some small % were legit - wedding gift where the groom and father have the same name.

Most were just sending the package to a friend to save 6% tax on a 250K ring...

 

I'm not sure what you are getting at here other than shipping across state boundaries doesnt always work.

 

Interesting. So, technically, if I buy a $300 VF 19-S Standing Liberty quarter from a LCS in OH, it's a collectible and not an investment coin?

Nope. It's a bullion investment with a very large premium. No sales tax.

I don't buy from Heritage, so I don't have to worry about this.

 

Not even close.

You owe the taxes regardless of whether the seller collects it (sales tax) or doesn't (use tax).

That applies to the $3 gadget you bought from Amazon before they started collecting from every state. Or the $300,000 coin.

The # of use tax returns filed is tiny, doesn't mean it's not owed.

If the avoidance gets big enough, the taxman finds an alternate way. That was my point.

 

You are missing my own point completely, in that the language that ohio has on their own site would exempt many of the coins sold by Heritage from taxes in ohio, yet they are taxing on ALL coins. That was my point.

 

Agreed ... but I think Heritage is going for simple (to them)