Paying sales tax on US Coin/Currency sales

I have a question for the experts here. Is it legal for anyone to charge sales tax on the sale of US Coin or paper currency? I notice a lot of sellers on the 'bay charge sales tax for coin or paper currency that is legal US Tender and I did not think that was legal. Does anyone know for sure? Thanks for the help on this
-Justin

 

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I thought you couldnt charge sales tax on fleebay?

 

Oh coervi there are a lot of sellers that attach sales tax if you are within the same state as the seller. I'm not sure about the policy regarding their rules for sales tax... I just know my local dealer never charges me sales tax on any paper or coinage I buy from him and I buy A LOT. LOL coinvault tonight is selling a "prooflike 2009 ASE" by Daniel Carr.... good lord.

 

There are many states that deemed that coin and currency is a taxable item. So if you live in that state I'd say it is the sellers obligation to collect it. It's not the "Seller Charging it" it's them collecting it. The State is Charging it.
Other then that you can:

1. Vote to change the rule
2. don't buy it
3. move

In many of those states there are different rules like no sales tax if it's gold and over 3k. Or if it's bullion then no tax. It's all up to the state though.

 

Sales tax is a state tax and every state's sales tax code is different. In any case sales tax is a tax levied on the buyer not the seller. The seller as a condition of doing business in the state is burdened with the responsibility of agent and trustee for collecting and submitting the buyer's taxes to the state. Buying from a seller outside of a specific state's authority of imposing the responsibility of agent and trustee does not relieve that buyer of the sales tax liability.

 

The simple answer...yes, it is. Many states don't charge sales tax on coins, but some do. For instance, my state does, and if a dealer doesn't charge me, legally I'm still supposed to compensate the state. My neighboring state doesn't charge tax on coins, or clothing and food, so if I shop there I'm not obligated to pay taxes because I'm spending money outside my state. Each state has it's own laws on sales tax.
Guy

 

Sales tax on US coinage or currency is illegal because it is legal money. A bank cannot charge you sales tax on a bag of pennies or a stack of bills. However, as soon as you pay more than face value for coins or currency then it becomes a collectible or antique and then is subject to sales tax laws of your state. That is the legal basis states stand on in charging sales tax for money, the fact you are paying over face value.

As to which sellers have to charge you sales tax, it depends on their nexus. A nexus is a physical connection to a state. If they have no nexus they are not required to, and usually do not, collect sales tax. Legally, the buyer is then required to pay use tax to his state in lieu of paying sales tax. If your state charges sales tax on coins, and the seller does not collect it, legally you are required to pay the use tax, usually on your yearly tax return. most people do not, though.

 

I was in a nice coin shop in S.L.O., CA earlier this year and was surprised when sales tax was added to my purchase, in ID I haven't been taxed on purchases.

 

Welcome to CA...we even tax the air you breath....literally!
Guy

 

You owe your home state sales tax on the purchase of out-of-state goods.

http://www.boe.ca.gov/pdf/pub79b.pdf

Pay up.

 

Its true. States are stepping up this enforcement as well, since they have spent everything they have ever taken in and then some. I have even seen audits being performed on people with colelctions and the state going back through records to reconstruct coin purchases out of state or overseas and then levying sales tax and penalties. Collectors are getting assaulted on every turn nowadays be it the IRS 1099 regs, sales and use tax, etc. A collector really needs to think about the structure of their purchasing and storing and disposal of their collections if they are putting any kind of serious money in their coins.

 

ohio is the same way.

 

Not if those goods are consumed and/or remain within that state. It would be impossible for them to prove they weren't.
I pay enough CA taxes to be bothered by more.
Guy

 

If the coin was purchased in say Nevada, (just example, I do not know their sales tax regarding coins), then you wouldn't be charged CA sales tax. If NV does not tax it, then you won't be charged any sales tax. If you bring the coin back to CA then legally, based upon CA law, the good brought in is subject to CA use tax. Even if you inherit a coin and not buy it, by bringing it into CA you owe a use tax. To get around that you could keep the coin in NV and not bring it into CA therefor no use tax would be owed. CA cannot tax you for an asset purchased and kept in another state, though they have and will continue to try to. The bottom line is states are truly desperate for money, and are passing all kinds of laws to raise money, many of them unconstitutional. The use tax, though, has been ruled constitutional IF you bring an asset into the state and "use" it. Simply owning a coin is considered "use"

States have been going to sales held in the state or being auctioned from the estate of someone in that state and systematically charging use tax for all of the coins, and making the owner "prove" they already paid sales tax. The burden of proof, after the state has levied a proposed tax, is on the owner to prove they already have paid the tax unfortunately.

I was in corporate tax responsible for CA among other states. I spent way too much time going over this stuff. Its upsetting and unfair, but that is the law in those states unfortunately.

 

So what if you own a collection and move to a different state. Do you owe taxes for moving there on all your coins?
And would that make a difference if the state you moved from does not charge tax on coins?

 

Yep, if you moved from a state that didn't charge tax to one that did, technically you would owe use tax on the collection. These laws were passed and not enforced for decades, but now states have overspent dramatically they are trying to enforce them more.

I told you the existing laws are unfair and upsetting. One of the reasons I got out of that line of work, I got too PO'ed every day thinking about it.

 

You coin dealers should form Delaware LLC's then transact online. It will make your customers a lot more happy.

 

The best way to buy coins.....CASH.

 

It might keep them from charging you sales tax, but you are still on the hook for any Use tax your state might levy on the transaction.

 

Many Use Tax Codes allow an adjustment for the taxes paid to the state of 1st use not to exceed the amount of Use Tax due.