During the Great Depression, Missouri, like several other states, issued “sales tax tokens” or “tax receipt coins” to address the challenge of making change for fractional sales tax amounts.
Here’s why these tokens existed and some key characteristics:
- Fractional Taxes: When sales tax rates were implemented, they often resulted in amounts less than a cent on small purchases (e.g., 2% on a 10-cent item). Without smaller denominations, retailers either had to round up, potentially overcharging the customer, or absorb the difference.
- Tokens for Change: Missouri, along with eleven other states, adopted the practice of issuing tokens to facilitate making change for these fractional tax amounts. These tokens typically represented fractions of a cent, often in “mills” (one-tenth of a cent).
- Materials and Appearance: Missouri’s tax tokens were made from various materials, including cardboard, metal (like zinc), fiber, and plastic. For example, there was a red plastic 1-mill token and a green plastic 5-mill token.
- Purpose: These tokens could only be used to pay sales tax, not to purchase goods. They were meant to ensure consumers paid the exact tax amount and weren’t overcharged by rounding up to the nearest penny.
- Decline in Use: While some states discontinued using sales tax tokens before World War II, Missouri’s tokens were in circulation until late in the 1940s and the system was officially ended on December 31, 1961. The inconvenience of carrying and handling these small tokens, coupled with wartime metal shortages, led to their eventual replacement by the “bracket system” of sales tax collection, which averaged out the tax on small sales.
Today, Missouri tax tokens are primarily collectibles, holding historical value as a testament to past approaches to sales tax collection. They are considered exonumia, a category that includes coin-like objects but are not official currency.
Are tax tokens worth anything?
Great question! Consequently, tax tokens are regarded by numismatists as ubiquitous and often are of comparatively little value. On the other hand, certain types and varieties are extremely rare, with as few as one specimen known.
What is a Missouri tax token?
Great question! Now own a genuine tax token, issued for the state of Missouri. First struck in 1935, tax tokens like these were made from various materials like cardboard, metal, fiber and plastic. Each “Mill” was equal to 1/10 cent, and could be used to pay the fractional taxes that were charged on smaller purchases.
Does Missouri charge sales tax on silver coins?
Great question! Fortunately, for the sale and purchase of gold and silver bullion, coins, collectibles, and currency, there is a complete exemption from sales tax. Therefore, all purchases of precious metals will be tax free, regardless of amount or form of the metal.