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 Replies: 7 / Views: 1,976 |
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Valued Member
United States
153 Posts |
Hi, I recently won a TPG graded quality Half Cent on Heritage which I intended to resell. I was charged a significant sales tax. In addition to the BP, surely this sales tax will cut into my profit margin later on. I understand that you can be exempt from these taxes if you are registered as a coin dealer. Does anybody know how I would go about doing this (I am a NY state resident.) Thanks |
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Pillar of the Community
 United States
2362 Posts |
I'm in CT so maybe a NY member can provide you with specifics for your state. I do caution you to research thoroughly and determine what one-time fees and recurring annual fees may apply. Secondly, what official tax filings are required.
CT is not business friendly and makes it expensive and time consuming for anyone wanting to start a business of any kind. I have a registered business in CT (an 1120 Corporation and not a coin dealer). As a result I have a CT Sales and Use Tax permit. It allows me to buy items for resale without paying tax, but I must collect the appropriate taxes when I sell the item. There are annual fees and tax returns.
Maybe someone knows a simpler way for you to only pay sales tax once?
Member ANA and EAC "You got to lose to know how to win". Dream On by Aerosmith |
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Moderator
 United States
23522 Posts |
You'll have to form a formal company, be it a Sole Proprietorship, an LLC, an S-corp or whatever. You'll be subject to all the laws, reporting and taxation specified by your state - it differs between states - and plan on a bit of workload as a result. And you'll also have to....buy and sell coins.
Think very carefully before you do this just to save a few percentage points in sales tax. It could be a real can of worms if you don't get it right.
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Valued Member
United States
83 Posts |
Taxes on numismatic items varies between states. Either for buyers or sellers.
An example being in FL there is no sales tax on the sale of coins and currency that are U.S. legal tender.
Also the law states "The sale of any other coin and any other currency with a price of more than $500, and the sale of gold, silver, and platinum bullion with a price of more than $500, is exempt. (guess this kind of leaves out the small time buyer)!
So you need to know the law in your state.
Ref: Florida Regulations 12A-1.0371 - Sales of Coins, Currency, or Bullion
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Moderator
United States
16677 Posts |
I've only bought one coin, ever, from Heritage.
Also, being in CA, if I see the sellers in CA, I always check their terms. If it's a biz that charges sales tax, I move on.
Those fees and taxes cut in big time to any flipping (what I like to do).
swcoin.ecrater.com
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Pillar of the Community
United States
2077 Posts |
I think what you want is a sales tax certificate, not a coin dealer license. I don't know if it's changed, but when I lived in NY state, individuals could get one too. It gives you the authority to collect sales tax and to purchase without sales tax. Technically anything you buy, with the intent to eventually resell, can be purchased exempt. Thing is, once you have the certificate, you must collect sales tax on anything you sell and send it to the state, even if you didn't buy it exempt. Could be more trouble than it's worth.
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Pillar of the Community
861 Posts |
All of this may become semi-moot(sic). The on-line sales tax bill just passed the Senate and heads to the House. It has a good chance of passing the House and Obama said, if the bill gets to him, he will sign it into law. The bill will require all on-line sellers, that have sales of $1 million/yr+, to charge sales tax for the state in which the item is purchased. This will effect large on-line coin dealers ie centsles, tnfc, eternitycoin, greatsouthern etc. This should be a very interesting Summer.
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Bedrock of the Community
United States
20753 Posts |
I noticed you said you won this coin. So any taxes you paid are, or could be, minor compared to the final value you received. Regardless, if it's just a coin you want to sell, I suggest looking into a coin show. If you can find one, go there and usually, not always, dealers at coin shows will buy and/or sell without any tax problems. So if you did sell it for more than the taxes you paid, your still ahead. Now since you won something of value, I wonder if Heritage has notified the IRS of your new found welth? Imagine getting a notice from the IRS saying you have to now pay income taxes on that coin too.  |
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Replies: 7 / Views: 1,976 |
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Posted 05/11/2013 2:37 pm
