Wayfair’ Sales Tax Compliance Burden Grows
I doubt that many—if any—coin dealers know the answers to all of the following questions.
If you don’t know the answer to every one of these questions, you are at risk of non-compliance with laws and regulations in states across the country. The potential taxes, fines, and penalties could put the survival of your business at risk.
Every state government is clamoring for more tax revenues to cover soaring budget deficits and a nationwide cumulative of perhaps $10 trillion of unfunded liabilities for government employee pensions and retiree health care benefits. In the past, businesses did not have to register with any state government to collect sales tax unless it had physical nexus through having either a store or office in that state, employees working in the state, or inventory stored in the state.
The South Dakota v. Wayfair, Inc. decision allowed states to expand the number of businesses that would be required to register to collect sales taxes by adding an “economic nexus.” This enabled state governments to enact legislation or adopt regulations defining the threshold levels at which out-of-state businesses could sell to in-state residents after which businesses with no physical nexus in that state would be treated as meeting the nexus requirement to register to collect and remit sales taxes.
When you factor in state, county, and local sales taxes that may apply, there may be 10,000 jurisdictions in America. To comply with every one of these sets of laws and regulations is proving to be increasingly onerous on every single business in the U.S., not just rare coins and precious metals dealers. There are a handful of companies that offer software for a fee to help businesses comply with the complexity of this burden, but none of them have yet been able to accurately calculate whether sales tax applies to each sale, much less always calculating the accurate tax rate.
Relief from the complexity of the “economic nexus” standard permitted by the South Dakota v. Wayfair, Inc. Supreme Court case will almost certainly require federal legislation. It happens that the Industry Council for Tangible Assets (ICTA), the national trade association for coins and precious metals bullion dealers, has been one of the more active organizations providing Congressional input on this issue.
If you would like to know the answers to the above questions or seek guidance on where to find the answers, members can contact ICTA. If you are not yet a member of ICTA, you can help them better represent the industry by joining. Go to https://www.ictaonline.org/join-icta to join soon. The business you save could be your own.
By the way, ICTA has a temporary new member incentive: Join ICTA between now and Sept. 30, 2020, and get your membership extended through the end of 2021. Type “NUMISMATICNEWS” in the “Referred By” field on the new member application to redeem this offer at https://www.ictaonline.org/join-icta. That is three months free—but hurry, this offer ends soon.
(Full disclosure note: I have served on ICTA’s board of directors since 2002 and also as its treasurer from 2002-2019. I continue to volunteer my time to work on ICTA’s efforts seeking to gain additional rare coins and precious metals bullion sales tax exemptions in the handful of states that do not yet have such exemptions.)
Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of 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, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://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 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and become part of the audio and text archives posted at http://www.1320wils.com).
The original article and others like it can be found at https://www.numismaticnews.net online.