Sales tax on coins and bullion in Nevada has been a sore spot for many dealers, collectors, and investors. Every state in the West, except Nevada, has exempted rare coins and bullion from sales tax for investors. Nevada just took the first step. Bullion is now exempt from sales tax.
The Nevada Tax Commission ruled with LCB-R154-10 that bullion used as a medium of exchange is exempt from sales tax. This ruling means that Nevada residents will no longer need to look to companies outside of Nevada to avoid sales tax.
This is important to Nevada bullion businesses that have been severely disadvantaged by tax in the past. Millions of dollars have been flowing out of the state by investors refusing to pay the state a tax on bullion. With bullion being a low-margin item, sales tax was often multiples of a dealers commission. Now Nevada has recognized that the dollars leaving the state are dollars that were not flowing into our economy.
This exemption is great news for those looking to invest in precious metals as now they can do business with local dealers without things such as shipping costs, service fees, and delays on receiving the products they have purchased.
This will also be a boon for Nevada's overall economy. Resident dealers are no longer at a disadvantage to every other dealer in the west. But, this is only the first step. Numismatics are not included in this bill and so they are still subject to sales tax. With Nevada still the only state in the West without an exemption there is still room for improvement.
Many invest in numismatics. Coins are very often valued based on their metal content, but moreso for their rarity. Some trade coins are like trading stocks, but even collectors most often have one thought on their mind as they are making a purchase, "it will be worth more one day when I want to sell it." Whether single coins, a smattering, or a set, the ultimate goal for a collector is to build value for the future. With this in mind numismatics being taxed may sound good for the short term, but with Nevada imposing a tax on these coins it begs one major question, "How much business is our state losing to other states?"
Nevada has always based part of its draw as a host to major trade shows, but there is not a single large show in Nevada due to our taxing numismatics. The American Numismatic Association hosts two annual shows that travel the country. Reno was being considered for the spring of 2012, but Pittsburgh, will be hosting the show instead.
Why? Sales tax.
That is a show that draws hundreds of dealers and thousands of collectors from all over the country.
We need to celebrate our reprieve on bullion, but please let your legislators know how you feel on Nevada still losing business to its neighbors.
• Allen Rowe is the owner of Northern Nevada Coin in Carson City.