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7/18/2023
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Last week SB 889 went to California Governor Newsom for his signature.
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This legislation ends a three-month negotiation between the California Coin and Bullion Merchants Association (CCBMA) and the California Department of Tax and Fee Administration (CDTFA) regarding imminent changes for coin and precious metal sales tax demises levels.
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The issue came to light when Jeff Martin, a San Diego dealer, spoke with CCBMA President Barry Stuppler about an unknown change in California's sales tax regulations. The change was raising the sales tax-exempt level for coins and precious metals.
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Without timely following statutory procedures or providing proper notification, the CDTFA announced and attempted to implement a new threshold of $2,000, up from the previous $1,500. This announcement was made in March but was effective January 1st, 2023.
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Barry immediately contacted the CCBMA's California lobbyist Steve Cattolica of SC Advocates in Sacramento. Steve did the needed research and contacted the CDTFA.
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During the months of May and June, Steve worked his way up the chain of command to get these sales tax regulations changed to January 1st, 2024, which was, by statute, the earliest the change could be implemented.
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After numerous conversations and informing CDTFA that CCBMA would take legal action to get a cease and desist from the court, the CDTFA offered to allow coin dealers to start increasing the sales tax number to $2,000 effective July 1st, 2023 and offered relief on sales tax not collected from January 1st through the end of May.
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While that compromise would have worked, CCBMA found that the relief the CDTFA was talking about was only penalties and interest, not tax collection itself. The fundamentally unfair problem of retroactive collection of sales tax from buyers remained.
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As a direct result of Steve's research, written and direct communication with CDTFA, the Agency requested that the California Senate Committee on Governance and Finance introduce legislation clarifying the starting date of the sales tax increase.
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This resulted in an amendment to SB 889 that was recently passed on consent, making the implementation date July 1st, 2023, and no sooner than 1 July for any future change.
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| The bill was sent to the Governor's office for signature, which is anticipated for August. (View Amendment to SB 889).
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| Members should now be collecting sales tax on any sales under $2000.
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| The CCBMA wishes to thank Steve Cattolica for his determination and knowledge in dealing with this issue that affects all California Coin and Precious Metal Dealers.
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