One result of the U.S. Supreme Court’s decision in South Dakota v. Wayfair in June 2018 is that many states have enacted laws or implemented regulations to require many out-of-state vendors who make wholesale and retail sales to buyers in that state subject to registration with the state treasury to collect sales taxes and possibly be required to file and pay annual business taxes as well.
One of the states that have been more aggressive in setting a low threshold requiring such registrations from out-of-state sellers is Pennsylvania. Once an out-of-state business makes just $100,000 annually of wholesale and retail sales to Pennsylvania businesses and residents, that state’s treasury expects those businesses to register and start filing tax forms, even if no taxes would ever be due (because of making either wholesale sales or retail sales of merchandise exempt from Pennsylvania sales and use taxes). The impact of this threshold will deter a number of smaller businesses from wanting to sell to Pennsylvania customers.
In the coin industry, we have already seen the impact of Minnesota’s onerous regulation of precious metals and rare coin dealers – on both dealers within and outside of that state. In that instance, several Minnesota-based dealers closed down or moved out of the state. The number of coin shows has declined as has the number of out-of-state dealers taking booths at the remaining shows. A high percentage of out-of-state dealers (including the company where I work) have opted to decline to sell to Minnesota customers who are not registered with the Minnesota Department of Commerce. As a consequence, Minnesota collectors and investors have seen their options dwindle.
Similarly, when California’s government adopted a regulation years ago limiting out-of-state businesses on the number of days they could attend coin shows in that state before they would have to register with that state’s treasury, that also reduced out-of-state dealer attendance at California coin shows.
So, it would not surprise me if Pennsylvania’s sales threshold for requiring non-Pennsylvania dealers to register with that state’s treasury will dissuade several out-of-state dealers from taking a booth at coin shows in that state. Unfortunately, the 2020 American Numismatic Association World’s Fair of Money is currently scheduled to take place in Pittsburgh, Pa. Many dealers who normally would take a booth at that show would have sales in excess of the state’s $100,000 threshold during the show.
It may be too late for the ANA to relocate the 2020 WFM to a state with a higher sales threshold before out-of-state dealers are required to register with that state’s treasury. Whether or not it is possible, it may be appropriate for the ANA Conventions Committee to incorporate the impact of a state’s out-of-state dealer sales threshold for registration in evaluating cities to host future ANA conventions.
(Note: Retail sales of precious metals bullion and rare coins are exempt from Pennsylvania sales tax. Currency sales are subject to Pennsylvania sales tax. However, for purposes for determining whether an out-of-state dealer is required to register with the Pennsylvania treasury to file sales tax forms, even if no sales tax is due, the sales taxability status does not matter. All sales to Pennsylvania businesses and customers are counted in determining whether or not an out-of-state business must register with the Pennsylvania treasury.)
Patrick A. Heller was the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award 2012 Harry Forman National Dealer of the Year Award and 2008 Presidential Award winner. Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2019), Professional Numismatists Guild, Industry Council for Tangible Assets and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at www.libertycoinservice.com. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and become part of the audio and text archives posted at www.1320wils.com).