Frequently Asked Questions
compiled and answered by Monte C. Dean (R-384)
Q #1: How valuable are sales tax tokens?
A: The most that a single sales tax token has sold for was over $500 for a unique National Sales Tax “milk cap” (stamped on a round pressed paper that looks like a milk cap). There are some others that have sold for $300 or more. It is not uncommon to see rare or very scarce items sell in the $100+ range. The vast majorities of sales tax tokens, however, are extremely common and are only worth a few cents each. Those that are most commonly found, the state issues, are the least likely to have much value. Please see the tab “Price Guide” above for more details on values of state issued sales tax tokens.
Q #2: How much are my sales tax tokens worth?
A: Above you will see a tab for “Classified”. You can give us information about what you have, and it is likely that we can give you an idea as to value. Please remember that the more information you provide, the more likely it is that we can help you specifically. In other words, if you say you have 56 Colorado sales tax tokens and that is the only information you provide, it is likely that you will receive a reply indicating that all 56 tokens probably have a value of no more than $3 or $4 for the whole lot. Although there are some extremely rare Colorado sales tax token patterns and scrip worth over $200 each, unless you give us details, we won’t know if you have one of those valuable rarities.
Q #3: When and where were sales tax tokens produced and used?
A: The first sales tax tokens ever produced were manufactured for the town of Kewanee, Illinois and began distribution in April of 1933. There were a number of merchants, towns, and counties in Illinois that also issued their own sales tax tokens, both in metal and in scrip (paper or cardboard) soon after.
In all, 15 different states eventually produced some type of medium of exchange, either token, stamp, or punch card, to help pay for and account for the sales taxes collected. States that used a circulating token of some kind included Alabama, Arizona, Colorado, Illinois, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Utah and Washington. Washington State also produced two types of small scrip issues in addition to their token types.
Additionally, the state of California did produce a pattern sales tax token, but only one is known to exist and there were never any state-issued tokens that actually circulated.
Kentucky did have a very brief period of state-issued paper sales tax receipts beginning in July 1, 1936. Although these were state-issued, they were more in the form of a small paper 31 X 31 mm. paper “stamp”, as opposed to an actual “token”.
Ohio also produced an amazing assortment of state-issued punch cards for sales tax collection beginning in 1936 with hundreds of different sales tax stamps printed all the way up until December 31, 1961. So if you only count “tokens” there were twelve states that issued sales tax tokens. Plus one, California, that only has a pattern known, plus Ohio and Kentucky that produced some form of paper scrip but not actually any “tokens”.
Missouri was the last state to demonetize their sales tax tokens on December 31, 1961.
In addition to the state issued tokens there were hundreds of different merchants, cities, towns, and counties that also made some form of token or scrip to help collect the sales tax. Just a few of the states that made use of such private or provisional sales tax tokens or scrip included California (in addition to the known state issued pattern), Colorado (in addition to the state issues), Illinois (in addition to the state issues), Iowa, Kentucky (in addition to the state issues), Michigan, Mississippi (in addition to the state issues), North Carolina, Ohio (in addition to the state issues), Pennsylvania, Washington (in addition to the state issues), and West Virginia.
Additionally, sales tax token collectors avidly pursue anti-sales tax pin back buttons, bumper stickers, anti-sales tax tokens, and a number of other items that were produced especially against sales tax or sales tax tokens. There is a long list of states that had someone produce something that was against sales tax and these are as readily sought as the sales tax tokens themselves. Such items appeared in Idaho, Indiana, Kentucky, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, Oregon, Pennsylvania, South Carolina, Texas, and Wisconsin.
In short, there is something from most of the states that will intrigue a sales tax “token” collector beyond just the “common” state issues.
Q #4: Why were sales tax tokens made?
A: The great depression, which began after the stock market crash on “Black Tuesday”, October 29, 1929, launched the United States and the world into the darkest economic times in modern history. Since the vast majority of the income for most states relied on property (ad valoram) tax the number of people who could no longer pay their property taxes skyrocketed. Rampant unemployment, loss of income, loss of savings, and a general “depression” of all parts of the economic picture affected every layer of society. Unemployment rose to 25% in the U. S., international trade was cut in half, construction was halted to near zero, crop prices dropped to less than half of what they had been, mining and logging were virtually eliminated and all types of manufacturing industries were much reduced.
As the number of people and businesses who could no longer pay their property taxes increased and the number of those properties that were forced to be foreclosed upon or seized by some government entity, the states incomes to pay their own bills plummeted. Soon, many states were looking at the possibility of their own bankruptcy.
There were many attempts made during the next few years to try and find some means of tax increase that would be accepted by the public and proclaimed law within the legislations of those states. Many types of excise tax were attempted, but produced only minimum returns for the states, while the states themselves tried valiantly to reduce their own expenditures, to no avail.
Although some form of sales tax had been established in West Virginia in 1921, and a similar plan begun in Georgia in 1929, those beginning attempts at a sales tax were poorly implemented, ineffectively collected and little appreciated because of their failure to collect significant funds.
When the new sales taxes began to be implemented in the early 1930’s in an attempt to gain some ground for the states financing, those new legislations were similar to or the same as what we consider a sales tax today. Previous attempts at Taxable Transfers, Graduated Gross Sales Tax, Chain Store Taxes, Consumption Taxes, Gross Receipts Tax, Gross Sales Tax, Luxury Tax, Mercantile Tax, Service Tax, Turnover Tax and Value Added Tax were all types of taxes that were similar to the modern day Direct Sales Tax, but not really the same either in the implementation or the collection methods.
It was soon apparent to those states that began this “new modern” sales tax that the income from that source would greatly improve the state’s financial position. In some cases, such as in Mississippi, they went from a near bankrupt state to a surplus of funds in just a few years, primarily due to the collection of sales tax.
Within a very short period of time many states recognized just how wonderful the idea of sales tax was, although none of the states that adopted sales tax had an easy time of making that system into law. Many states quickly added themselves to an ever growing list of those that used a sales tax system to collect a significant part of the state’s income.
The single major detraction against the sales tax – repeated ad nauseum by the opponents of sales tax – was that it was and is a regressive tax. A regressive tax means that the poor pay a higher percentage of their income compared to the rich. Someone making a small income will use almost all of that money to buy needed supplies, clothing, food, and housing. While someone who makes more money will use a much smaller percentage of their income for those same basic necessity purposes.
Since those fundamental living expenses are the ones most likely to have a sales tax, the poor then pay a larger percentage of their income to that sales tax than would a rich person who uses a much smaller percentage of their overall income for such basic needs. In order to get legislation passed in many states, a “bribe” was usually given (usually to the democrats by the republicans) to “allow” certain exemptions. An exemption was a type or quantity of product or a price level where the sales tax would not be collected. Exemptions ranged from those that made good sense, such as exempting food, or inexpensive clothing, or medicine all the way to some extremely limited exemptions for such things as beer and wine, tobacco, or even certain meat products but not others. Exemptions were also set for minimum amounts required in order to meet the limitation for sales tax. Some states did not charge sales tax for amounts below a set cent limitation. A state might not charge sales tax on individual purchases of less than 20 cents, for example.
In addition to exemptions, the production and use of sales tax tokens were more of a political compromise, rather than being strictly for the benefit of the poor. Almost all history relating to this period when sales tax tokens were implemented points to the fact that their use was really promulgated for political purposes.
The reason given by most prior historical summaries regarding why sales tax tokens came into use prescribe to the belief that the motivation for those tokens was strictly as a benefit for the poor. Although, in practice, this was certainly true, a review of the actual legislative and government actions during the sessions prior to sales tax enactment and implementation often point to the sales tax token as a means of quieting those who proclaimed the unfairness of such a regressive tax.
The primary purpose espoused for the sales tax token during their initial introduction was that it allowed for the collection of the correct percentage of the assigned sales tax. In other words, if a customer went into a store to purchase a 6 cent item, and the sales tax percentage then in effect was 3%, the actual sales tax due on that 6 cent purchase would have been .18 of a cent, or 1 and 4/5th Mill. If there were no fractional cent devices available for use, the customer would need to pay a full penny for their 6 cent purchase, making the actual percentage that they paid nearly 17% instead of the required 3%.
To avoid this unfair situation almost every state set a minimum limit for when the sales tax started. Some states legislated that all purchases below 10 cents, or 15 cents or some other figure, were exempt from sales tax. But some states claimed that the sales tax was due on every purchase, even for a single penny.
To alleviate this iniquitous imbalance of percentage payment states began issuing sales tax tokens worth some part, or fraction, of one cent. Most states used a 1 Mill (1/10th Cent) and/or 5 Mill (1/2 Cent) system, although there were other fractions of a cent sales tax token denominations produced. Usually the denominations for each states sales tax tokens were set according to that states percentage of sales tax due as well as the minimum payment exemption.
Q #5: What is a Mill?
A: A Mill is a monetary denomination with a value of 1/10th cent. 5 Mills would be equal to ½ cent. It would take 1000 Mills to be equal to one-dollar. Sales tax tokens are most commonly found in the denominations of 1 and 5 mills, although some states used other odd denominations depending on their sales tax rate. Both Colorado and Utah used a 2 Mill tokens and Illinois’ only state issues were of the 1 ½ Mill denomination, as examples.
Q #6: What is scrip? Is this a misspelling for script?
A: Scrip is the correct spelling for a token or currency most commonly made of paper or cardboard, although other materials such as wood have been used. In short, scrip is simply a token that does not look like a token (circular, square, octagonal, oblong, or other possible shapes) and is not made of metal. For sales tax scrip this usually means a rectangular or square piece of paper or cardboard that has a denominational value or trade value that has at least part of its worth for the payment of sales tax. For a full 9 page explanation on what sales tax scrip is, see the American Tax Token Society Newsletter issue number 158, V. 42 #3 of July-September, 2012, which may be purchased from our treasurer, listed under the “Contact” Tab above. If you become a member of the ATTS ($12/year), Jim would probably send you that issue for FREE, too, if you requested one.
Q #7: I see some listing with letters and numbers like R-3 or R-5 or R-7. What does that mean?
A: These are called rarity ratings, which simply mean that whoever is assigning those rarity estimates is basing that rarity on their own experience. In most instances, when a book is published with rarity ratings, you can rest assured that the majority of those ratings will be accurate, or nearly so.
Almost all token collectors and dealers, including those for sales tax tokens, use the same methodology for token rarity estimates as follows:
R-1 More than 5000 known to exist. Extremely Common
R-2 2001-5000 known to exist. Very Common
R-3 501-2000 known to exist. Common
R-4 101-500 known to exist. Scarce
R-5 51-100 known to exist. Very Scarce
R-6 21-50 known to exist. Extremely Scarce
R-7 11-20 known to exist. Rare
R-8 5-10 known to exist. Very Rare
R-9 2-4 known to exist. Extremely Rare
R-10 Only one known to exist Unique
Q #8: Are sales tax tokens rare?
A: No. As a group they are not because the most common ones found today will be state issued tokens made in the tens of millions for each kind. However, in the last catalogue made about sales tax tokens, “United States Sales Tax Tokens and Stamp: A History and Catalog” by Merlin K. Malehorn and Tim Davenport in 1993 (commonly referred to as the M&D for the two authors last name initials) it is interesting to note how many seriously rare items are listed. That catalogue lists 1248 different items, of which 1/3+ (467) were either R-10 (Unique, only one known to exist) or R-9 (2 to 4 examples known to exist). Although the common state issues will always be common, there is a plethora of very scarce and rare issues, too.
Q #9: What is a type or a variety?
A: A type is a token that is obviously different, one from another. For example, a state might have issued several “types” of fiber composition tokens. To determine if the token is a different type, one from another, it must be obvious to the eye that there is a significant difference. A variety, on the other hand, usually requires some measurement to determine the difference, one from the other. There might be a slight difference in the color, or a difference in the distance of one line of text to another or the style of the text used, or any other number of small differences that determines one variety from another. In short – a type has a more immediate recognizable difference, one from another than does a variety of a type.
Q #10: Can I complete a full set of sales tax tokens?
A: It is certainly possible to complete a full set of the state issued types, with some diligence, within 2 or 3 years. Especially if you make contact with older members of the ATTS who will be helpful in selling (or even giving) you tokens that you need for cheap prices. If you are only interested in completing a Type Set of state issued sales tax tokens that set is slightly more than 150 pieces. If you decide to complete a variety set, too, then you would need slightly more than 300 different state issued sales tax tokens for a full variety set.
It would be absolutely impossible to collect a full set of all of the state issues, plus the different scrip, plus the known related memorabilia, which now numbers over 2000 pieces. If you were to add the Ohio sales tax punch cards and stamps into the equation, then you would be looking at well over 3000 pieces. Since a great number of those items are Very Rare, Extremely Rare, or Unique no one person could ever be at the right place at the right time to get all of those, regardless of the time spent or the money available. Prying an R-10 or R-9 item out of many collectors’ hands is beyond difficult, regardless of the monetary offer. To get one of each of them would likewise be impossible.
Q #11: I have the M&D (see question #8 above), but I can’t find the token I have listed anywhere?
A: Since the M&D was issued some 20 years ago, there have been hundreds of new finds reported. It is possible that what you have is one of those items, or you may have another brand new unlisted token. The best way for us to help you is for you to list the details about your find above under the “Classified” Tab and you should certainly receive specific answers provided that you do give us good details. If you have a rarity, it is also likely that you will get a few offers for such an item if you do want to sell.
Q #12: Where can I purchase sales tax tokens?
A: RIGHT HERE!!! If you are in need of specific tokens just list them above under the “Wanted” Tab. You will also find that those individuals listed above under the “Contact” Tab will probably be more than happy to help you find most common or scarce items. By becoming a member of the ATTS (American Tax Token Society – $12/year – “Join” Tab above) you can get in contact with all of the most prolific dealers and collectors in this genre.
Your next best bet is eBay, of course, and you can certainly find lots of common sales tax tokens listed there every day. But if you want to find the tougher items, you will find a membership with the ATTS to be most helpful.
Q #13: Where can I sell my sales tax tokens?
A: RIGHT HERE!!! If you have common sales tax tokens there are a number of us who buy big bags of those simply so we can search for tougher minor varieties. Don’t expect too much in the way of monetary gain for such common bags, as they are usually only worth a few cents per piece when bought in big random bags. Or, if you have a scarce or rare piece, list it above under the “For Sale” Tab and you may be pleasantly surprised by the offers you receive. If nothing else, you can list your tokens on eBay, but then you have to pay the eBay Fees and the Pay Pal fees. Try here first and you might end up with a little more money in your pocket afterwards.
Q #14: I am interested in giving a history lesson that includes the information about sales tax tokens to my Boy Scout troop or class or history group or other group. Where could I get tokens to show for that purpose?
A: RIGHT HERE!!! There are a number of us who have thousands or tens of thousands of common sales tax token duplicates. If you were to post a request above on the “Classified” Tab, you would certainly be contacted by someone as long as you supply an email address, and I don’t doubt that if you need 100 or less examples you could probably get them for free, or the postage costs, or at least very cheaply. We would also be more than happy to help answer any questions you might have about your presentation or any facts about sales tax tokens that you might be looking for.
Additionally, we would LOVE to see your report on your presentation, along with photographs and we would even consider publishing your report in our American Tax Token Society Newsletter. If you needed help putting such an article together, we would be happy to assist you. If you would like to contact our editor, Mike Strub, about that possibility, see the “Contact” Tab above.
Q #15: I have a pin back button, bumper sticker, bank brochure, merchant sign, state issued sign, state issued rules and regulations booklet, original photograph, cash register display sign, or any other type of item that lists SALES TAX but it is not a token. Is it worth anything?
A: If the item has the magic words “Sales Tax” on it, then it is probably of interest to some of us. It is important to remember that in some cases states had transportation taxes or excise taxes or entertainment taxes that LOOK similar to sales tax, but are not actually sales tax. The best way to find out is to simply post a description and/or picture above on the “Classified” Tab if you are not sure of the item you have, or the “For Sale” Tab above if you know what you want to sell the item for. Some Pin Back Buttons have sold for over $100, and many of the other items that are not tokens but say sales tax on them might be pretty valuable too.
Q #16: Is the condition of the sales tax token important?
A: As is true for every kind of collectible item, the condition will always help determine the value of any collectible. This is also true of sales tax tokens, scrip and related memorabilia. In some cases, as for the more common state issued sales tax tokens, or the modestly scarce, the condition will make a huge difference as to the value, or even for it to be worth collecting. A common sales tax token, of which there are probably millions left in existence somewhere, is really only collectible if it is uncirculated grade, or nearly so, with no problems of any kind. That token might be worth $1 if it is really perfect and a collector needs it. That same token in terrible condition is virtually worthless.
By the same “token” (sorry, I had to say it at least once), super rare pieces might not have as much difference in value according to condition as long as those pieces remain rare with no additional examples discovered. For example, the only known California state issued pattern, mentioned above, is in absolutely horrid icky condition, but because it is the only one known, it is still worth $300 minimum. If it was still the only one known, but in a very nice grade, say Almost Uncirculated, I have no doubt that it would be worth closer to the $500 mark.
Even if the item is extremely rare, or even unique, there are some collectors who simply have no interest in putting an “icky” example of anything in their collection. Our president, John Ostendorf, is such a collector. From years of collecting experience he knows that even if an item is exceedingly rare it will find fewer interested buyers if it is ever offered for sale if it is not in presentable condition.
Q #17: I’m new to collecting sales tax tokens. What should I do as a beginning collector?
A: WELCOME – we seriously love new collectors, as you can often teach us things we have forgotten. As you’ve probably figured out by reading some of the information on this site, we are generally pretty kicked back and consider FUN to be at least as valuable as the tokens we own. There are a few things you can do that will make your introduction to our fraternity more enjoyable and rewarding:
1. Buy the book. At present, as listed above in question #8, the “M&D” is the book to own and you can usually find one on eBay for about $40. If not, ask us, on the “Classified” Tab above and one of us can surely point you in the right direction to find that book.
2. Ask for a mentor. There are a number of us that sincerely enjoy helping someone learn our hobby and will correspond with you as frequently as time allows via telephone, email, or even plain old snail mail. Again, on the “Classified” Tab above, ask for a mentor. This is not an “I’m the big dude so you have to listen to me,” kind of thing. Mentors, if they do their job, will have just as much fun as you do with the exchanges involved.
3. Join the American Tax Token Society. See the “Join” Tab above. For the ridiculously cheap price of $12 per year you get four fantastic issues of our Newsletter, a free printed classified ad in each and every issue you want to post in, membership here on our website and direct contact with the most knowledgeable collectors today.
4. Make a want list. List what you are going after so that you have a ready inventory of what you need and what you have. If you start out your collecting venture this way, you will always be happier in the future as your collection becomes stronger. Ask your mentor, or post here, if you need help making that want list and we will be happy to answer your specific questions. Starting with the state issued tokens is always the easiest and most fun since most of them are so readily available.
5. Ask for help. If you are uncertain about anything as you begin collecting we will be happy to attempt to answer any questions you might have, again, under the “Classified” tab above, or through your mentor. Quite often new collectors will ask questions that we don’t know the full answer to and that can often lead to that “new” collector finding out information that none of us knew before. It is especially fun, even for a “new” collector to find out great information, or discover new pictures and have their article appear in our Newsletter.
Q #18: I have an idea for writing an article for the Newsletter, but I don’t know if the information I’m thinking of writing about has already been examined before. What should I do?
A: Ask Us!!! We absolutely super-love new authors! They often lead us to new knowledge simply because those new authors find a new approach to discovering the answer to a question. Mike Strub, our Editor, listed above under the “Contact” Tab, is the man to approach with your idea about an article. He can best determine if what you are considering will make a good article and probably give you helpful advice on what to do to make it great. You can rest assured that Mike has great experience in helping authors present their information in a professional and concise manner.
Q #19: I have a lot of duplicates of some of the sales tax tokens in my collection. Does anyone trade?
A: Oh, yes. Many of the folks in our fraternity absolutely love to trade and some of us have been doing so for decades. If you have any duplicates of R-5 to R-9 (See question #7 above) you can post those to the “For Sale” Tab above, asking for trades rather than cash and list what you have and what you are looking for. Jim Calvert, (See “Contact” Tab above) our secretary/treasurer, has the largest stock of duplicate scarce and rare pieces on planet earth and he would be the first individual to contact. You can rest assured that if you have anything one of the “old timers” needs for his own collection that they would probably trade many times the actual “cash value” of items in their own duplicate stock for something they need themselves.
Q #20: I’ve found an error on something that you have presented here. Who do I contact to get it corrected?
A: Above under the “Contact” Tab, find Loran Frazier, our Webmaster’s email address and let him know. He will determine if there is a change required, or he may contact some of the board members to help make that determination. Rest assured, however, that none of us believe everything we right (or, perhaps, write) is always perfect and we are always interested in standing corrected if such is necessary.