From the May 3rd Numismatic e-newsletter:
Should sales tax be applied to online coin and bullion sales?
Here are some answers sent from our e-newsletter readers to Editor Dave Harper.
As much as our Congress seems to forget the idea, the United States is a federation of 50 sovereign states, each with their own laws. Some states have sales taxes which include numismatic items; others do not. Thus the idea that such sales should be taxed is impractical, as most sellers will not be able to know whether an item is taxable in the receiving state. Besides, if a seller’s state does not tax such items, it is unreasonable for him to tax a sale, even going to a state which does impose such taxes. In other cases, an item costing less than some pre-set value (in Florida, $500) is potentially taxable, but not if over that value.
Panama City, Fla.
Sales tax on online purchases is currently in place now in Canada. Merchants are suppose to apply a sales tax if they are Canadian and the item is sold within Canada. Depending upon location of vendor and purchaser, it may include the federal GST/HST and possibly the provincial sales tax as well. This also applies to eBay sales. Some merchants on eBay do not collect the tax but the Canada Revenue Agency (CRA) is watching and has both in Canada and Australia (according to my info) requested eBay open its sales records for their inspection.
Out of country purchases are collected by the post office, if sent via post, who act on behalf of the CRA/Customs Canada. Often only a sampling of the parcels are charged the taxes and a $5 fee for the service.
Whether or not we like it, big brother is watching.
Absolutely no way. Small online sellers cannot feasibly deal with 9,600 taxing jurisdictions. Paperwork for small business is already a nightmare.
Brick and mortar coin stores have the benefit of face to face contact with customers for both buying and selling. If they do pass the law and exempt sellers of less than $1 million as proposed, it would be of little consequence when hyperinflation hits if one silver dollar is selling for $1 million dollars. Or maybe the small time online sellers could unite and buy off the congressmen like Amazon is currently doing.
Colorado Springs, Colo.
Why should there be a sales tax on rare coins, currency, or precious metals when banks and financial institutions don’t have a tax on their investment products?
I have been the manager of a monthly coin show in Omaha, Neb., for 39 years. Recently we moved the show six miles to the east to Council Bluffs, Iowa, where there is no tax on numismatic items. So far my customer and dealer response has been 100 percent positive and the state of Iowa is receiving the benefits of money that all of us spend in Iowa.
We can argue the pros and cons of sales tax, but in the meantime we will be spending our money in Iowa.
More Coin Collecting Resources:
• Get the 2012 Coin of the Year – limited quantities remain!