Sales Tax Information
I want to share with you what, if any, impact the Supreme Court decision in the South Dakota v. Wayfair case will have on your orders. For some of you nothing changes, but unfortunately for others we will have to start collecting your states sales tax on each purchase. So what has changed? Basically the definition of "nexus" as it applies to collecting sales tax. In the past "nexus" was determined by a companies physical presence in a state. If a company had an office, a salesperson, etc. within a state that did not exempt rare coins then that company had to collect the state's sales tax for each purchase.
New Mexico is a good example. They do not offer any exemptions for collector coins, bullion coins or bullion. If you lived in New Mexico and bought a coin from a company with an office in New Mexico they were required to collect sales tax. However, if you lived in New Mexico and bought a coin from a dealer in Texas sales tax was not required because the dealer had no physical presence in New Mexico. The Wayfair decision has changed that by re-defining "physical nexus" to mean an "economic nexus." In other words, if a dealer accepts orders from a state other than their own they now have nexus and are required to abide by the tax laws of each and every state they serve. Now, some states have created sales thresholds that have to be met before collecting sales tax is required but others haven't. And of the ones that do have thresholds many of those are different.
The good news is that many states offer exemptions for collector coins, bullion coins and plain bullion (think bars and rounds). However, each state is different here as well. Some only offer exemptions on one or two of the three. For instance. Ohio taxes collector coins but exempts bullion coins and bullion (see below for definitions of these).* Other states that offer exemptions only allow them on orders over a certain amount. Maryland, for example, offers an exemption on all three for orders of $1000 or more. Anything under that is charged the states sales tax.
Confused yet? It's a lot to try and wade through. Below is a list of states that don't currently exempt coins or bullion. Now, please keep in mind that this can change based on any new laws each particular state may pass.
Taxes charged on collector coins, bullion coins and bullion:
Arkansas, Hawaii, Kansas, Kentucky, Maine, Mississippi, Nevada, New Jersey, New Mexico, Tennessee, Vermont, West Virginia, Wisconsin, District of Columbia
Taxes charged on collector coins but not on bullion coins or bullion:
New York, Ohio (New York exempts orders of bullion coins and bullion of $1000 or more. Anything less is taxed.)
Has exemptions based on the amount of purchase:
California...orders over $1500
Connecticut...orders for collector coins are fully exempt, only orders of $1000 or more for bullion coins are exempt
Maryland...orders of $1000 or more for both collector and bullion coins are exempt
Massachusetts...orders of $1000 or more for both collector and bullion coins are exempt
The states not listed currently have full exemptions on collector and bullion coins. Also, some of the states without exemptions have not yet passed laws to require out of state sellers to collect sales tax. In addition, we may fall under thresholds that some states have set and are not required to collect sales tax. However, all of this is subject to change and we'll work hard to keep this information as up to date as possible.
*Collector coins contain less than 91% bullion (coins like the Morgan silver dollar or the St. Gaudens $20 pieces) Bullion coins contain more 91% or more bullion (coins like the American Gold and Silver Eagles)
If you have any questions about this confusing topic please feel free to call us at (800)323-5055.