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Tax exemption for coin collectors

Published (3/30/2012)
By Lee Ann Schutz
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Collectors view coins and precious metal bullion as an investment, but the state categorizes these items as tangible personal property and their purchase is subject to sales tax.

Commonly known as the “bullion bill,” HF1107, sponsored by Rep. Mary Kiffmeyer (R-Big Lake), would provide a partial sales tax exemption on any single transaction by an individual in excess of $1,000 on these commodities. The House Taxes Committee laid the bill over for possible inclusion in an omnibus bill. Its companion, SF1944, sponsored by Sen. Chris Gerlach (R-Apple Valley), awaits action by the Senate Taxes Committee.

“This bill will create businesses and jobs for Minnesota,” said Gary Adkins, from Burnsville, who buys and sells coins. He said the bill could bring coin conventions to Minnesota, and create new coin-related businesses. This, in turn, would create new revenue sources from income taxes and sales taxes.

He referenced a southern Minnesota coin club that held its convention in Iowa because coin transactions are tax exempt. “That is a sad, sad note that we have to go to the state of Iowa to do business,” he said.

An analysis by the Revenue Department shows the bill would reduce revenue to the General Fund by $870,000 in fiscal year 2013 and $1.1 million in fiscal year 2014.

Rep. Jim Davnie (DFL-Mpls) said the bill singles out an exemption only for these collectors, while other collectors are subject to sales tax.

According to the revenue analysis, the averaged 2009 and 2010 total sales tax remitted by Minnesota coin, bullion and collectibles dealers was $682,000. It was noted that these items are subject to price changes as determined by the markets.

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