The Akron Legal News

Reinstatement of sales tax exemption for coins sales sought

TIFFANY L. PARKS
Special to the Legal News
Published: October 6, 2015

The owner of The Executive Coin Company has joined Reps. Ron Maag, R-Lebanon, and Christina Hagan, R-Alliance, in advocating for the passage of a bill that would exempt collectable coins and metal bullion from sales taxes.

“We are currently celebrating our 25th year in business. Perhaps it would be more correct to say that we are surviving our 25th year in business,” Dave Miholer said of the company located north of Akron.

“Since 2011 our sales have declined over 60 percent. The first quarter of 2015 projects this year to be down an additional 40 percent over last year. This loss in sales can be attributed in large part to the sales tax disadvantage we face every day.”

House Bill 26 would reverse the sales tax exemption that was repealed 10 years ago.

“When we lost the sales tax exemption in 2005 nearly all of our customers were uncomfortable buying gold, silver and coins through the Internet or from out-of-state dealers by phone,” Miholer said.

“They were justifiably hesitant to send their money somewhere hoping that a box would show up with their merchandise in it. As a result, we were able to keep most of our customers — for a time.”

Miholer said they weren’t happy to pay an additional 5 to 8 percent on their investments, but they really had no other options.

“Let me assure you that today they have plenty of other options,” he said, noting that his store is an hour away from the Pennsylvania border.

“A customer wanting to invest in the gold bar that is being passed around will save $2,646 in sales tax by making the one-hour drive to Pennsylvania. That customer did not have that option in 2005.”

Pennsylvania enacted similar legislation in 2008. Michigan passed its own version in 1999.

“Indiana is likely to pass the legislation soon. We will then be surrounded on three sides,” Miholer said. “It is very easy to see why HB 26 is necessary. We simply cannot compete without it.”

Miholer stumped for the bill before the House Ways and Means Committee. It later passed the House in an 84-14 vote and has been referred to the Senate Ways and Means Committee.

Customers who were previously uncomfortable ordering gold, silver and coins online do so now willingly and successfully, Miholer said.

“There are many safeguards in place to protect the consumer that were not there years ago,” he said.

“We have lost nearly all of the customers that used to come in and buy five, 10, 20 or more ounces of gold. One hundred, 500 (and) 1,000-ounce silver customers are gone. These are the same customers that were my best jewelry customers.”

To combat the losses, Miholer began selling coins and precious metals online.

“Frankly, it has saved our business. It is the only part of our business that is growing,” he said.

“Without HB 26 this is the future for my business. I will have no need for my 11,000 square-foot retail store. I will not be able to keep my jewelry business open. I will not be able to keep half of my current employees. I hate to paint such a bleak picture, but it is the truth.”

Miholer said many other coin dealers in Ohio are in similar positions.

“HB 26 is pro-business, pro-consumer and pro-Ohio,” he said.

[Back]