Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 213 - Miscellaneous Taxable Sales › Rule 701-213.5 - Antiques, Curios, Old Coins, Collector's Postage Stamps, and Currency Exchanged for Greater Than Face Value

Current through Register Vol. 47, No. 3, July 24, 2024
Curios, antiques, art work, coins, collector's postage stamps
				  and such articles sold to or by art collectors, philatelists, numismatists and
				  other persons who purchase or sell such items of tangible personal property for
				  use and not primarily for resale are sales at retail, and their sales price
				  shall be subject to tax.
(1) The sales
				price of stamps, whether canceled or uncanceled, which are sold by a collector
				or person engaged in retailing stamps to collectors shall be taxable.
(2) The distinction between stamps which are
				purchased by a collector and stamps which are purchased for their value as
				evidence of the privilege of the owner to have certain mail carried by the
				United States government is that which determines whether or not the sales
				price of a stamp is taxable or not taxable. A stamp becomes an article of
				tangible personal property having market value when, because of the demand, it
				can be sold for a price greater than its face value. On the other hand, when a
				stamp has only face value, as evidence of the right to certain services or an
				indication that certain revenue has been paid, its sales price shall not be
				subject to either sales or use tax.
(3) The sales price from any exchange,
				transfer, or barter of merchandise for a consideration paid in gold, silver, or
				other coins or currency shall be subject to tax to the extent of the
				agreed-upon value of the coins or currency so exchanged. This agreed-upon value
				constitutes the sales price or purchase price subject to tax. Currency or coins
				become articles of tangible personal property having a value greater than face
				value when the currency or coins are exchanged for a price greater than face
				value. However, when a coin or other currency, in the course of circulation, is
				exchanged at its face value, the sales price of the sale shall be subject to
				tax for the face value alone.
Losana Corp. v. Porterfield,
14
				Ohio St.2d 42, 236 N.E.2d 535 (1968).
EXAMPLE 1. Taxpayer operates a furniture store. The taxpayer
				  offers to exchange furniture for silver coins at ten times the face value of
				  any coins dated prior to January 1,1965. Upon any exchange pursuant to the
				  offer, the value of the coins for purposes of determining the tax on the
				  exchange will be equivalent to the value as agreed upon by the parties, without
				  regard to the face value of the coins.
EXAMPLE 2. Taxpayer operates a hardware store. In the regular
				  course of business, the taxpayer receives silver coins dated prior to January
				  1, 1965. Taxpayer has received the coins at face value for the sales price and
				  only that value is subject to tax. Also see Attorney General Opinion Griger to
				  Bair, Director of Revenue, May 15, 1980, #80-5-13.
This rule is intended to implement Iowa Code sections
				  423.1(47), 423.2(1) and 423.5.