Under Minnesota law, selling a 1794 Flowing Hair dollar as a resident or to a resident would require you to get a license as a bullion coin dealer.
That’s because the coin surpasses the one percent precious metals content to classify it as bullion under the new state law and, with a $57,500 price in G-4, it exceeds the $5,000 annual threshold in sales.
Confused? So are many Minnesota residents, coin dealers and national coin selling businesses.
Lee Orr, owner of Great Lakes Coins and Collectibles, Burnsville, Minn., said that he’s heard a lot of questions and concerns from collectors about the law.
“I’ve had to tell some collectors that were looking to sell their coin collections on Craigslist that they can’t without registering for a license,” he said.
A lot of dealers are not selling to customers in Minnesota because they don’t want to get licensed, he said.
“I had to broker a large deal to sell a collection because the seller was a Minnesota resident, the collection was held by a firm who couldn’t do business in Minnesota and the buyer in Arizona wasn’t registered either,” Orr said.
Gary Adkins, owner of Gary Adkins Associates, Minneapolis, Minn., said that the law was hurting consumers by limiting the choices they had in coin dealers.
A list of Minnesota dealers compiled before the new law showed some 100 dealers in Minnesota, he said.
“Less than half are registered, while the other half have left the state, closed up, or figured they would not need to get a license,” Adkins said.
“I figure the attrition rate is somewhere around 50 percent.”
But there are some pluses to the law.
“The law had gotten rid of some bad players in the coin market as well, so that’s a good thing,” Adkins said. “If you ask consumers if we should regulate dealers, they’d say yes. But there’s a better way.”
Not only is the law affecting Minnesota collectors, but a large sales tax creates a “double whammy,” he said.
“A lot of national dealers will no longer do business in Minnesota, as well as many eBay sellers, because of the new coin dealer law,” Adkins said.
Greg Allen, owner of Greg Allen Coins, Saint Paul, Minn., said that numbers provided by the Minnesota Department of Commerce show how drastically the law had reduced the coin market for Minnesota residents.
“As of Oct. 30, 86 separate businesses are registered,” he said. “That’s only 86 businesses the Minnesota collector can deal with.”
Numbers for individual licenses were low as well, he said.
“There are also 881 individuals registered, but many of these are people who work for coin dealing companies,” he said. “One company has registered 227 people.”
He also said that the website for finding out what businesses and individuals were registered was difficult to find. Those interested in viewing the registration list can go to https://www.pulseportal.com/selectStateAndBoard.do and click on “Search Licensees.”
“As for coin shows, there are a number of dealers that are registered and a number that are not registered,” Allen said. “There is a licensing exception for dealers attending occasional trade shows.
“The Minnesota Department of Commerce has said two coin shows is the limit for the exception.”
Orr, who also coordinates the MOON coin show in Brooklyn Center, Minn., said all but one of the 118 available tables sold at the Oct. 10-12 show.
“Of the dealers there, 60 percent were out of state,” he said. “Only two to three of them were licensed.
“All dealers from Minnesota were licensed.”
Attendance at the coin show was down 200 visitors, he said.
“This was probably more due to sales tax than the law,” Orr said.
Andrew Swammi, coordinator for the monthly Roseville Coin Show, said that there have been a few empty tables at the show.
“We have a 20-table show and two to three tables were empty,” he said of the Roseville, Minn., show. “Typically, we’re able to sell them all.”
And collectors noticed that some of their regular dealers weren’t setting up at shows.
A common question on the bourse floor is “where’s such-and-such,” Swammi said.
“The collectors know something’s going on, but don’t know what,” he said. “Until the day a dealer says, ‘You live in Minnesota. I can’t sell to you,’ the collector is unaware of this law.”
The futures of some coin shows in Minnesota were in jeopardy, he said.
“It won’t be long before we lose a monthly show,” Swammi said. “I know the Roseville show will survive because it’s built to be a smaller show with a wide selection.
“Another show that needs to rent hotel rooms and requires many dealers to be a part of it may run into trouble.”
Allen said the Minnesota law also affected sales at national coin shows.
“At the ANA show in Chicago, there were some dealers who were not selling to Minnesota residents,” he said. “I heard of one collector at the show who was going to buy a coin, but the dealer found out he was from Minnesota.
“The dealer said he couldn’t do the sale because the buyer was from Minnesota and he didn’t want to deal with the law.”
Collectors from Minnesota are going to national coin shows and are finding very few registered dealers, he said.
“At the Baltimore show, there were only 10 to 12 dealers registered,” Allen said.
This article was originally printed in Numismatic News Express.
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