This is the first in a planned series of articles on the groups and associations that serve the interests of numismatists around the country.
For the last few years, the Industry Council for Tangible Assets (ICTA) has been on a mission. The organization, which was founded in 1983 and serves as a watchdog over federal and state laws that might affect the coin industry, has waded in when requested to help initiatives to remove taxes on in-state retail sales of rare coins and precious-metals bullion.
At the heart of the issue is the misperception by many state governments that coin dealers generate an enormous amount of sales tax for state coffers. In state after state, legislators have resisted sales-tax exemptions because their fiscal notes suggest numismatics brings in millions in sales taxes. And in state after state, ICTA has testified before legislatures and met with individuals in congresses, demonstrating the realities point by point.
- Retail sales tax on the purchase of rare coins and bullion drives customers to buy out of state. Not only does this reduce income (and thus payrolls and income taxes) for in-state businesses, customers—particularly novice or elderly customers—are more vulnerable to fraud with Internet and telemarketer transactions than they are with local businesses that have roots in and accountability to their communities.
- Buyers of rare currency and precious metals also spend a significant amount of money on other items that are taxable: folders, albums, books, loupes, and the countless other accessories that go with collecting.
- Coin shows and expos avoid states where rare coins and precious metals are subject to sales tax. ICTA has demonstrated that when dealers travel to coin shows and expos, they opt for states with no or reduced sales tax 80% to 90% of the time.
- Major coin shows generate millions in additional revenue for hospitality, travel-industry, and other businesses in the surrounding area. The American Numismatic Association estimates that each of its two annual shows generates more than $4 million in the local economy.
- States that tax sales of rare coins and precious metals tend to estimate the annual revenues generated by these items to be around $2–$4 million. When state treasury officials and legislators meet with ICTA and go over the numbers they are invariably surprised to learn that the actual amount is less than $500,000.
States that have revoked existing exemptions have proven ICTA’s point. When Florida eliminated its exemption in the mid-1990s, the number of coin shows plummeted. The Orange County Convention and Visitors Bureau estimated that, as a result, the state’s hospitality and travel-industry businesses were losing $60 million each year—far more than the amount of sales taxes being collected on rare coins and precious metals. When Ohio dumped its existing exemption in 2005, within six months at least 100 dealers had either left the state, closed, or experienced layoffs.
At present, 34 states have enacted complete or partial sales-tax exemptions on retail sales of rare coins and precious metals. Dealers in adjacent states that do tax these items lose a significant amount of business to these states. When these dealers’ home states enact exemptions, the playing field is immediately leveled, and their income rises significantly.
In the past three years, ICTA has helped coin dealers and collectors in Virginia, Nebraska, Ohio, Pennsylvania, and Indiana gain or retain sales-tax exemptions, and has helped expand exemptions in Texas and Louisiana. ICTA is presently leading efforts in obtain an exemption in Tennessee, Alabama, Kentucky, North Carolina, Kansas, and Minnesota, and working to head off an approaching sunset provision with Virginia’s exemption.
ICTA’s efforts, which are funded entirely by its members, go well beyond sales-tax matters—and although it is primarily a dealer organization, ICTA’s work benefits collectors as well. One recent innovation is ICTA’s State Affairs Committee, which organizes volunteers around the country monitor their states’ legislation through a digital service called State Net. The volunteers receive daily emails notifying them of activity on every bill in their state with the potential to affect the industry. The volunteers review the notifications and forward them to ICTA if action seems warranted.
The association is also active in Washington, D.C., where it seeks to educate legislators, tax officials, and others about the needs of hobbyists and dealers. ICTA monitors and helps influence the language of laws like the Hobby Protection Act, which combats the counterfeiting of numismatic items and grading-service slabs, and the proposed Marketplace Fairness Act, which would give states the authority to collect online sales taxes from out-of-state vendors.
For more information on the many ways ICTA serves the collecting community, head over to their website at www.ictaonline.org. ❑