I am a Virginia state resident, and I recently found a nice coin for sale from a Virginia Beach based coin dealer. Imagine my chagrin when the invoice came and it included sales tax. This is the first time that sales tax has been levied on me for a coin purchase. I should explain that all of the central and western states I have lived in have some type of exemption for the purchase of coins, currency and bullion (some more extensive than others). I think charging sales tax on the purchase of said items is *^$#(*&@ I know there are counter arguments. The most common one I hear is the equity principle: everything else is taxed so why should there be a special exemption for numismatic goods. I can also understand the concern that granting coins, etc. an exemption sets a dangerous, fiscal precedent in the sense that it opens the floodgates to every type of hobby/special interest group lobbying for their own sales tax exemption. But I feel that there is an important distinction to be made with numismatic goods: they constitute more of an investment than an ordinary good (durable or consumable). I think this for several reasons. First, even die-hard collectors are investors to some degree because we all would like to see the values of our collection appreciate over time; there really isn't any such thing as a 'pure collector'. There are only 'collector-investors'. Second, bullion coins can be included in Individual Retirement Arrangement (IRA) accounts. Third, coins, currency and bullion are actively traded on exchange markets (unlike other collectibles). When I go to coin shows in Virginia, I have purchased many coins from both Virginia-based and out-of-state dealers and have never been charged sales tax. No one seems to worry about legal/regulatory consequences. Not only do dealers not charge me sales tax, but some are brazen enough to even give me receipts reflecting no tax levied. I can only surmise that numismatic transactions constitute such a relatively tiny amount of tax revenue that it is not worth it for state revenue collecting agencies (with their already limited, overstretched resources) to send revenue agents to coin shows. So I have long been accustomed to not having to pay taxes on coins. Back to my story, I canceled the coin transaction. I briefly considered enlisting the help of an out-of-state family member to evade the tax by shipping it out-of-state, but I decided it wasn't worth the hassle. I figure that there are plenty of nice coins out there, and I will find them in due time (probably at shows) and naturally, I will not pay sales tax on them.
Sales tax is a tough issue. States have different laws and it drives people crazy. Dealers have a hard time trying to keep everyone happy.
Think about it: That dealer sold you a coin thru the mail-- How does he know whether or not you are from the VA sales tax bureau? As for him: smart move. Better safe and lose a sale than sorry and humongous fines and penalties. As for you: hey, have it mailed out of state if the sales tax bothers you.
I beg to differ....I'm one of these pure collectors who could care less if I ever see my collection go up a single half cent. As far as taxes, I've seen, even in states where traditionally taxes aren't gathered on coins, start to charge tax, but have never gotten an honest answer as to why. A lot of places got by with just taxing purchases made with credit cards and not cash, but even those places that I frequent charge tax on cash purchases as well. Maybe the IRS is cracking down on them, who knows. Guy~
Just so I am clear on what you are saying. I know you said you did not care if your collection went up a half of a cent but would you care if your collection went down to having no value at all? I am not in it to make a profit either. I am doing this to have something to do with my son and to have something of value to pass on to him when I go. I just dont think I could honestly collect if I knew in the end that what I was purchasing and saving for my son would be worthless in the end. I am just curious on how you feel in that end of what you said. Everyone is differant and to each his own.:thumb:
Actually, it wouldn't make any difference to me at all. I'm an avid investor but don't consider my coin collecting a part of that in any way. If I bought a coin for 2K today and tomorrow it was worth $0, so be it. The wealth I accumulate in collecting is through knowledge and enjoyment. I mean do people here ever pay 5 or 10K for a nice family vacation to Europe or anything? Whats the difference....you don't get a physical return on that,but the return on memories and experience are far greater than any monetary return. Guess it's all in what people value in life...money isn't one of those things for me, but then I've never had to worry too much about it either and that may be the difference. Guy~
Just so we are on the same page, My values in life are not money or the gaining of more money. Of course, if I told you I would get up every day and go to work for free because I do not care about the money, I would be lying to you. I am collecting coins, like I said before, for the time I can spend with my son. To be honest with you, I wouldnt care if we were collecting leaves off of differant trees if that is something he was interested in and it meant we could spend more time together. I think were we differ is at the end of my road, when it is time for me to go, not only do I want to leave my son with many memories and a bond that is unbreakable. I want him to have something that he and I did together that is both worth something because of the time we spent together and worth something in the real world. I know it will be more important to him because of the sentimental value and the memories. Once again, I could care less if I ever see a dimes profit out of it. As a father, you just want to leave things to your kids that they will treasure.
Sales Tax on Coins I have never been charged sales tax at a coin show. I have paid sales tax at a shop in Maryland, but was told that purchases over a $1000 are not taxed. I purchased some coins from a Pennsylvania shop and was told that coins in Pennsylvania are exempt from sales tax. In Ohio at a shop if I paid cash I was not charged sales tax but if I paid by check or credit card I was charged sales tax. Its very confusing. But like others on this forum, I buy coins for the pleasure and not for investment so if I like the coin, I don't fret about sales tax.
I live in Indiana, and get charged sales tax when buying online with Indiana dealers. The tax is minimal because I never pay much for anything. I always wondered if my transaction is even reported to the IRS, or if the dealer just pockets the couple of cents.
