Tax The Poor Coin Collectors

How come people who buy coins over $1,000 are not taxed ( the rich ) but under $1,000 ( the majority of us ) pay the tax . To me either all or none should pay .
Sales Tax
California residents will be charged sales tax as well as bidders who pick up at this Auction without a valid Resale Certificate. Please note that the purchase of any coin or bullion lot(s) with a price, including the buyer's fee, in excess of One Thousand Dollars ($1,000.00) is exempt from California sales tax.


this was taken from Bowers & Marenas auction on a 1916 SLQ .

rzage:kewl:

 

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It is California. Do you really expect anything more logical than that?

 

It's like 401k.
1000+ is an investment while under 1k is hobby. If they don't tax you now, (hopefully) the value will increase and they will actually get more money later -inflation.

 

I think over $1000 it comes under the capital gains taxes and is considered an investment. When you sell it then you have to pay capital gains taxes.

Ruben

 

BTW - you and I think alike and I'd noticed that quite a bit.

I was just pouring over that same site and their own auction site as well.

Ruben

 

But I wonder how many other states have such stupid laws .
rzage

 

I think you summed it up correctly... by California's logic if a coin is more than $1000 it is viewed as a capital investment. Presumably if such a coin is sold at a profit down the road, you'd pay capital gains tax on it (of which California gets a cut of by virtue of your California taxable income being based on your federal taxable income).

But if it's less than $1000, they presume it to be a hobby purchase that you're going to keep probably indefinitely, so they need to get their cut now by means of collecting sales tax on it. (Unless you have proof that you're in the business of selling coins and have a resale license, in which case you're exempt.)

Of course the reverse could easily be true if you buy a $1000+ coin to keep indefinitely as part of your personal collection, or buy a less than $1000 with the intent of selling it at a profit, but this appears to be California's policy. Keep in mind this kind of thing varies from state to state. (Some states and jurisdictions don't tax coins at all, some it's taxable no matter what, and many positions in between.)

Theoretically every time you sell a coin at a profit it should be considered a capital gain... but materiality can come into play, as well as justification of it being a like kind exchange, that sometimes the IRS doesn't expect a cut (especially if the potential gain is small compared to your total income and you're doing this basically as a hobby.) If you're in the business of selling coins at a profit, that's a whole different story of course.

DISCLAIMER: Please keep in mind that the above should not be construed as professional tax advice... if you have any questions regarding tax implications consult a tax accountant and/or a lawyer.

 

Great minds think alike .:thumb:
rzage

 

And then there's u2

 

Thats too bad. No sales tax on any coins here in Missouri.

 

LOL:whistle:
rzage

 

None in Illinois either .
rzage

 

I live in CA, but fortunately AZ is only 2 blocks away, so thats where I do my coin buying....with no sales tax on coins. Of course, I have bought in states with taxes on coins, but some have said if paid in cash, no taxes added. As a buyer, I could care less which sellers deal with tax evasion.
Guy~

 

More than a couple states charge sales tax. However, I remember none with limits either high or low.

BTW, Oklahoma does charge sales tax.

 

I've read some where that California is going to tax coins where sale is below $1500 instead of $1000.

Some dealers such as Heritage charge tax on Californian customers on their Tuesday and Sunday auctions even though the auctions is not held in California, very unfair.

 

Roger that good buddy!!!

 

The thing with Heritage, since they do business in California, think the Long Beach Auction, they have to charge, collect, and remit sales tax on auction lots sent to California customers. If they were strictly doing business out of their Dallas office it would be a different scenario.

 

As far as I know that hasn't been established in any court case yet. The States have been brow beating businesses for a long time and petitioning Congress. Congress has refused to pass any legislation to allow for internet sales tax from foreign states and the courts haven't gotten a clear case yet.

Now maybe I'm wrong about this and something has changed but then point out the federal court case or the passed Bill.

Unless Heritage has a permanent office and substantial business from that office, then they absolutely don't need to charge tax.

Ruben

 

BTW that relates to sales tax. Capital gains is a who 'nother issue and depends solely on residency of the individual or business

Ruben