NCBA Opens Survey, Seeks Dealer Data to Help Combat State Government Estimates
Tuesday, June 15, 2021
Section: Association

Coin and bullion dealers, if you knew you could spend just 10 minutes and save the coin and precious-metals communities tens of thousands of dollars and possibly help save or expand your own business, would you do it?

If the answer is yes, here is your chance.

You may have heard that the state of Arkansas recently enacted a sales and use tax exemption on the sales of coins, currency, and bullion. The National Coin & Bullion Association—the new, more encompassing trade name for the Industry Council for Tangible Assets—is fighting to preserve sales-tax exemptions on coins, paper money, and precious-metals bullion in 39 states . . . and we are also working to gain such an exemption in the 11 states that do not currently have one.

But we must have your help if we are to succeed.

We are not asking for money (though you are, of course, always welcome to donate).

If we can get just 400 coin and precious-metals dealers to take this survey and arm us with the data we need to make our case, our prospects for keeping exemptions and gaining new ones will increase dramatically.

Here is why.

What typically happens in a state considering enactment of a new exemption or possibly revoking and existing exemption is this:
  • The state’s legislative fiscal office (called different things in different states) begins by estimating the amount of “lost revenue” arising from a sales-tax exemption. This estimate is often ridiculously high. For example, when Virginia was first considering an exemption in 2017, it estimated it would lose up to $14.5 million dollars each year.
  • When NCBA and other organizations seek to set the record straight, we are told that in the absence of hard data, the legislature will assume its own estimates are correct. These inflated estimates then become part of the legislative history and are treated as facts.
Without hard data to support our claims, it will be an even steeper uphill battle.

That is where you, and every other coin dealer come in.

If you will take just a few minutes to complete this survey, we will have the data we need. We firmly believe, based on our previous estimates, that the data will support our arguments for a sales-tax exemption for coins, paper money, and precious-metals bullion.

In other words, we will be much better able to demonstrate to state legislatures that Tennessee, and practically every other state, will be better off financially if they exempt coins, paper money, and precious-metals bullion that are sold by coin dealers from sales taxes.

Take Colorado, for example.  Recently its state auditor conducted an evaluation of its sales and use tax exemption for coins and precious-metals dealers (as required by state law to do every five years).  It contacted a sample of Colorado dealers to ask about the impact of the exemption on their businesses to determine if the state was better off keeping this exemption in place. We are confident that the completed audit will ultimately show that NCBA's estimates were much closer to the actual impact of the exemption than the legislature had originally assumed. We want to be able to offer other legislatures a similar "audit" before they have other, less accurate, numbers in front of them.

We also believe the survey will help us
  • Document that coin dealers can and do sell merchandise other than coins, paper money, and precious-metals bullion.
  • Show that coin dealers can easily make sales to retail customers in states other than their own, where they often do not have to charge sales tax.
  • Prove that coin dealers are far less likely to take tables at coin shows in states without a sales-tax exemption—thereby depriving the state of enormous revenues from other sources, like hotels, restaurants, transportation, and shopping.
  • Derive per capita in-state retail sales figures for rare coins and bullion in states with exemptions compared to those that lack one, which we believe can show how sensitive such sales are to the existence of an exemption.
All we need is 400 or more dealers to provide their data.

Won’t you help by being one of the 400?

Please keep in mind that all survey responses are anonymous. Optional contact information—should you choose to provide any—will be kept strictly confidential.

One more thing you need to know:

If we can get enough dealers to complete the survey, we know it will have clout. Five years ago, we did a survey as a direct response to a concern from the state of Tennessee, where its fiscal agency had challenged the data that we had put before them. Without that survey’s data, Tennessee (and most other states we’ve worked in since then) would have almost certainly fallen back on its own estimates, which we know to be inflated. Instead, its projected decline in estimated state and local sales-tax collections were dramatically reduced.

Using states’ inflated estimates makes it unlikely that lawmakers will come down on our side of the issue.

In other words, it all comes down to this: If we can get enough dealers to take this survey, we can present lawmakers everywhere with cold, hard facts that support establishing or preserving exemptions.

If we cannot, they will continue to rely on “estimates” that will make it much harder for us to succeed.

In Virginia, the Department of Taxation assumed that every dollar of wholesale activity in the state translates into a dollar of retail sales, and that every Virginian buying US Mint bullion is doing so from a Virginia retailer who charges sales tax!

You and I know that such an assumption is absurd.

But states will continue to base public policy on such fictions in the absence of fresh, real data.

Think of it this way: Every year you dedicate hours, or even days or weeks, to activities that help our industry and protect our livelihoods. All we are asking for is 10 minutes of your time, and the results could be tremendous.

So, please, give us a few minutes of your time.

Remember that the answers can be anonymous, and that even if you provide optional contact information, it will be held in the strictest confidence.

Give us the ammunition we need, and we will lead the fight across the whole country.

Coin and bullion dealers, CLICK HERE to get started.

Please share this article with other coin and precious-metals bullion business owners, even those who do not have a store or office.

Thank you for your time and consideration. Together, we can do great things for our industry.