Rich Uhrich from Rich Uhrich Rare Coins in Hershey, Pa., was hoping to one day leave the cold and frigid winter environs of Pennsylvania for a warmer southern climate.
He expected he had a number of years before that plan would be put into action, when he was closer to retirement.
What Uhrich didn’t expect was Pennsylvania Gov. Tom Wolf’s plans to repeal the 10-year-old sales tax exemption for coins, which has moved up that relocation date.
Wolf’s plans are for imposition of a 6.6 percent sales tax. Uhrich's plans are to relocate to the Orlando/Tampa area of central Florida.
“I have lived in Pennsylvania my entire life and recently was named the 2014 Dealer of the Year by the Pennsylvania Association of Numismatists,” Uhrich said. “However, after much thought, my wife, Karen, and I have decided to move to Florida and hope to do so by the end of this year.
“We will not be changing the business at all, except for the mailing address and phone numbers.”
While moving closer to his in-laws and escaping the harsh Pennsylvania winters are also deciding factors in relocation, the sales tax issue moved the decision closer to the top of Uhrich’s priorities.
“The new governor of Pennsylvania has proposed applying the state sales tax to coins, at a rate of 6.6 percent,” Uhrich said. “Both ICTA [Industry Council for Tangible Assets] and PAN [Pennsylvania Association of Numismatists] are actively fighting this proposal. The proposal might be enacted and it might not. If it doesn’t pass, the governor, in my opinion, will try again in the future."
Here's the bottom line how the proposed sales tax will affect Uhrich’s business and those of other dealers:
“If I sell a coin for $1,000, under this proposal I would have to collect $66 in sales tax,” Uhrich said. “Most of my customers would not pay the tax, but would order the coin from someone out of state that doesn’t have to charge them the sales tax. So I would either lose the sale, or have to pay the sales tax out of my own pocket.
“Some people say, coin dealers are so profitable that paying a sales tax shouldn’t be a problem. Well, here are the facts: Last year was a good year for us, and our net profit as a percent of sales was 6.2 percent. If I have to pay a 6.6 percent sales tax, now the business is unprofitable. I work fairly hard (as anyone who has ever seen me at a show can attest), but I won’t work for free.”
Uhrich said he still plans to continue operation of his numismatic dealership and will continue to attend major shows.
ICTA Executive Director Kathy J. McFadden will present an informational session at 1 p.m. May 8 in conjunction with PAN’s spring show at the Monroeville Convention Center in Monroeville, Pa.
PAN President Tom Uram will also present an update on PAN’s efforts toward retention of the sales tax exemption.
“Our association holds two major coin [trade] shows in Pennsylvania’ every year,” Uram says in the announcement for the May 8 meeting. “These events would be severely curtailed or eliminated if the sales tax exemption is repealed. The 70 out-of-state dealers that participate in our coin shows travel here because of the tax friendly environment that currently exists in Pennsylvania.
“They would no longer include Pennsylvania on the show circuit if the tax law changes.”
ICTA’s chief operating officer, David Crenshaw, sent a letter to Wolf on March 24 urging him to abandon his 2015–2016 budget proposal to repeal the sales tax exemption, 72 P.S. § 7204 (65), that was effective Aug. 4, 2006.
The exemption is for investment metal bullion and investment coins.
“Since the exemption was enacted, sales have grown for Pennsylvania coin dealers,” Crenshaw wrote in his letter to Wolf. “The exemption provides a level playing field for moderate-income investors, allowing them to buy and sell these investment items to diversify their portfolios and IRAs.
“Without the exemption, Pennsylvania investors will simply make their purchases in neighboring states—Maryland, New York, Delaware—where there is no sales tax on these investments.
“Pennsylvania coin dealers will lose business, lose income and pay less in Pennsylvania income taxes.”
Currently, 31 states have sales tax exemptions on investment metal bullion and investment coins.
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