Coin dealers miffed by repeal of sales tax exemption
Tom Noe continues to influence the state's rare-coin business.
When Gov. Bob Taft signed into law the $51 billion budget for the two years that began July 1, rare-coin buyers lost their exemption to the state sales tax. An exemption for the sale of gold bullion also was repealed.
The Ohio Senate put the repeal into the budget after the Toledo coin dealer's management of an unusual state investment in rare coins went sour. The ensuing scandal involving investments by the Ohio Bureau of Workers' Compensation has made headlines for months.
''I think it's all related to Noe and I think it's going to hurt,'' Ron Nelson, a Cleveland coin show promoter, said Friday.
Senate President Bill Harris, an Ashland Republican, didn't see it that way. While the Senate made changes in the bureau's investigative authority because of the scandal - the House has yet to agree - the tax exemption was unnecessary and lawmakers were looking for ways to increase state revenues while restoring needed services, he said.
Nelson said reservations for his Ohio Coin Expo, scheduled for Aug. 19-21 in Cleveland, are slow in coming and he blames it on the tax.
In Cuyahoga County, home to the show, the sales tax is 7 1/2 percent, including 2 percent the county adds to the state's 5 1/2 percent share.
''I'm sure a lot of the out-of-town dealers may or may not have heard about it. There are lots of shows around the country. Those shows will boom. Our shows will wither,'' Nelson said.
Collectors seeking coins can find them tax-free on the Internet or in other states, Nelson said. They also are going to buy coins and gold from brokerage houses that are exempt from the tax, he said.
The Senate was looking for ways to make up the money lost when gasoline sales were exempted from a new tax on commercial activity and cuts proposed to some health care benefits for the poor were restored.
So it repealed the coin and gold exemption. The new revenues should raise about $1 million a year, according to Legislature estimates.
Harris said new guidelines in a workers' compensation reform bill his chamber passed are designed to keep the bureau safe from fraud, a detail directly attributed to Noe's dealings.
''We ought to be more definitive in what they can do and what they couldn't do,'' said Harris, whose Senate bill is pending in the House.
Noe's lawyer has said the fund he managed for the state cannot account for as much as $13 million of its investment.
Harris said the repeal of the coins-and-gold exemption wasn't tied to the scandal. ''It had no relationship at all,'' he said.
That's of little help, Nelson said.
''My show will be hurt. I run three shows. I want to see what happens with this (August) show. It really is not an extremely profitable business. I would make more money if I went to work for McDonald's.''
John McCarthy is a correspondent for the Ohio Associated Press' Columbus bureau.