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<p>[QUOTE=&quot;Conder101, post: 723774, member: 66&quot;]They started during the Depression.&nbsp; With businesses closing down and people out of work the states were desperate for revenue.&nbsp; So several states instituted a sales tax.&nbsp; The rate was almost universally 1%, I think the highest rate was 2%, and it was collect on the full amount of the sale.&nbsp; They had to since at the time most purchases made were for well less than a dollar.&nbsp; That caused a problem though since that meant that the tax would often be less than a cent.&nbsp; You couldn&#039;t just let that less than a cent tax slide though because that would be the bulk of the revenue, and you couldn&#039;t just round it up to a cent because that would represent a much higher tax rate.</p><p><br /></p><p>So the states created their own &quot;tokens&quot; denominated in mills or tenths of a cent and 5 mill pieces.&nbsp; The merchants would purchase a supply of tokens from the state (This gave the states their tax money up front) and then tey would use them to make change for the sales tax paid by the customer.&nbsp; For example on a twenty cent purchase a tax of two mills was owed.&nbsp; The customer paid an extra cent and received 8 mills in change.&nbsp; Now that the customer had some mills they could use them to pay the tax on other purchases at other stores.&nbsp; If the sales amount was not an even ten cent amount the tax would be rounded up or down to the nearest mill.&nbsp; This would not cause too great a hardship because you were only talking at the most half a mill or 5/100th of a cent.</p><p><br /></p><p>The Federal government never liked the idea of the tax tokens and tried to stamp them out but they hung on for quite some time.&nbsp; The last state to stop using them was Missouri in 1961.</p><p><br /></p><p>Even in states that didn&#039;t issue tax tokens, local municipalities often did.</p><p><br /></p><p>There is a national club for collectors of sales tax tokens and their website can be found here.</p><p><a href="http://www.taxtoken.org/" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.taxtoken.org/" rel="nofollow">http://www.taxtoken.org/</a>[/QUOTE]</p><p><br /></p>

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