Did a bank have to collect use tax on Churchill Commemorative Crown coins bought for numismatic interest rather than ordinary use as money?

Plain-English summary

Banks sold Churchill Commemorative Crown coins to individual purchasers.

Tax counsel inferred that the buyers wanted objects of numismatic interest rather than coins for use as a medium of exchange. The coins were therefore tangible personal property subject to use tax, and the banks had to collect that tax from purchasers.

Common questions

Did the coins' monetary form make the transaction exempt?

No. Their numismatic purchase purpose controlled the classification in the memorandum.

Who had to collect the tax?

The banks selling the commemorative coins.

Citations and references

• No statute, regulation, or case was cited in the supporting memorandum.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/168-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/168-0020.pdf

Original ruling text

168.0020
State of California

Board of Equalization

Memorandum
To:

San Bernardino – Auditing (RLL)

From:

Tax Counsel (PRD) – Headquarters

Subject:

Sale of Coins by Banks

Date:

January 7, 1966

This is in reply to your memorandum of December 16 regarding the bank’s duty to collect use tax upon their sales of Churchill Commemorative Crown coins. It would appear that the purchasers of these coins are not purchasing them as a medium of exchange. The individual purchase of such commemorative coins is presumably a purchase of an object of numismatic interest, and as such is a purchase of tangible personal property subject to use tax. Accordingly, the banks must collect the tax on their sales of such coins. PRD:lar