HOUSE BILL 434: Coins/Currency/Bullion Sales Tax Exemption PASSED Tuesday May 23, 2017

Just received confirmation from Michael Muller ...

Today, Tuesday May 23, 2017, the North Carolina House of Representatives unanimously passed House Bill 434. The legislation would exempt retail sales of investment coins, investment metal bullion, and non-coin currency from sales and use tax.

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Very interesting. Thank you for posting this. I think I'll look around and see how other States treat this issue.

 

I'm in Illinois and we don't pay tax on coins. I don't know how long it's been a law but as long as I've been collecting it has.

 

In Nevada, we tax bullion that sells for more than 50% of its face value. A silver eagle would need to sell for $1.50 or less to be tax free. Bullion without face value is not taxed. Part of the reason I only buy online.

 

Coins have to made of metal to be exempt, so plastic patterns and sales tax tokens and glass patterns would be taxed. Also must be legal tender unless considered bullion, so medals, demonetized coins, or never-monetized coins of non-precious metal would be taxable.

Still a big step in the right direction. Nice too they did not place any money limit on what is exempt. Some states, like Calif., exempt only purchases above a certain amount, which penalizes less wealthy collectors.

Cal

 

Maryland exempts from sales tax purchases of bullion OVER $1000 in value.
So 1oz of gold or something in the neighborhood of 70ozs of silver.

It also applies to numismatic items of over $1000.
For instance I bought some coins from a Maryland dealer that were listed for over that value.
No sales tax.

 

To those of us in this industry here in NC, this is very welcome news! (Cited from: https://www.cointalk.com/threads/ho...-exemption-passed-tuesday-may-23-2017.296883/)

 

Ohio just repealed its tax in January. We were paying tax on both coins and bullion. No more.

 

Holy cats! I can't believe this is the first I've heard of this.

CoinTalk rules prevent me from commenting on the NC legislature's recent activities (thank goodness), but I'd certainly gain some personal benefit from this bill...

 

Most of those would be tax exempt under the NC law either under the heading of Investment Coins.

Investment coins are Numismatic coins or other forms of legal tender.......
...Numismatic coins are considered collectibles, valued more for their rarity than their actual metal content.

So as long as they are valued significantly higher than their metal content they would be Numismatic coins and therefore exempt.

For those things such as the glass or plastic patterns, paper script, tokens etc would fall under Non-coin currency

Forms of money or legal tender other than manufactured of metal with a fair market value greater than any statutory or nominal value of the currency.

There aren't many non metal numismatic items that aren't worth more than their face value so they would be exempt too.

Demonitized or items that were never legal tender but which were used as money even if not precious metal would fall under Numismatic coins and therefore be covered. Medals on the other hand might not be covered because they were never legal tender or used as money so the can't fall under numismatic coins, and they are usually made of metal so the can't fall under the non-coin currency excemption


This law is better than the Indiana one. In indiana it either has to be bullion greater than .995 fine, or it has to be legal tender in order to be exempt. That means tokens and possibly all foreign coins and currency are NOT exempt.

 

I think there can be some latitude in interpretation. Items that appear to be coins but aren't metal or are not legal tender would probably not be covered under the "Non-coin currency" section regardless of the wording in that section, so would be taxed unless made of precious metal, in which case, they would fall under the "Investment metal bullion" section. Plastic or glass patterns should be considered coins. They're in Judd and offered as coins by dealers and auction houses. You can argue both sides as to whether sales tax tokens are coins or not. May the best lawyer win!

Cal

 

One other numismatic area where zealous tax collectors could ride roughshod is in the area of ancient coins, especially ancient bronze coins. Not precious metal, not legal tender, some weren't really issued by a "nation". How about an aes rude? Was it ever a coin? Was it ever legal tender? Hopefully, the publicans will be generous in their approach to collectors and dealers.

Cal

 

That would be a good question. If you accept that it was a "coin" then it has a value far in excess of its metal content and that makes it a numismatic coin and exempt.

Sales tax tokens may not be coins, but they were a form of money and so should be covered under the non-coin currency clause, at least the plastic ones. And since the plastic ones are covered I would argue that the metal one should be considered as numismatic coins as far the investent coins clause goes because the are a form of money and they are collectible. I agree though, ambiguous enough to be a battlefield for lawyers.

I doubt they will really bother splitting hairs that fine though.

 

I meant to post this a while back; it's a page reporting the progress of the bill.

http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2017&BillID=H434

As of yesterday, its status was "Ordered enrolled". I think this means it's on track to go to the Governor during this legislative session, which ends this week.

I haven't heard anything about a veto on this one; while our current governor isn't big on tax cuts for businesses and the wealthy, I'm not sure this is a fight he'll care to pick. If he did veto it, I understand that he'd have to reconvene the General Assembly.

If it does pass into law, I wonder when it will go into effect?

 

Ratified and presented to the Governor today! For a bill like this, I expect that he'll not be eager to sign it, so he may let it become law without his signature -- after a 30-day delay, since the Legislature adjourns Friday. (He gets only 10 days to act when the Legislature is in session.)

Kinda drumming my fingers here waiting for the end of the 7.5% surcharge when I cherry-pick the local pawn shops. And the end of paying the flat-rate use-tax option each year, since the amount we spend each year online that isn't either coin-related or already taxed (Amazon, Apple, Dell, big chain retailers) is quite trivial.

 

Signed by Governor, 7/25/17!

 

Any word on when this is effective?

 

Well, this is interesting -- the text of the bill says that it is effective July 1, 2017!

I stopped by my favorite pawnshop over lunch and asked the manager when the store would stop charging sales tax, and got a blank stare. He said he'd talk to his district manager, probably this afternoon, and ask about it.

 

Based on the wording of the bill, we are not charging tax as of today. Hope we are correct in this.

 

I don't know who you'd call to verify that, but it looks quite explicit in the bill itself. I'm certainly planning to stop paying the tax effective immediately...