Contributed By Doug West, Ph.D.
Collecting Sales Tax Tokens has been a part of numismatics for years and can be a lot of fun. This brief article gives the collector an introduction to the origins, identification, and current prices of common tax tokens.
Background of the Tax Token
Currently there are no known tax tokens in circulation. They were mainly products of the depression of the 1930's along with wooden nickels, depression scrip, and other kinds of emergency money. They were meant to assist in the collection of consumer's sales taxes when the amount due was only a fraction of a cent. During the Great Depression people did not like the idea of paying a whole penny tax on a small purchase, say, 25 cents. The tokens served as a useful device to make the new tax laws more palatable to the buying public. Establishing the use of these tokens by states normally involved a vigorous public debate. They were even opposed by the federal government on the grounds that they were “money” and thus competed with its constitutional coinage responsibilities. However, this latter opposition did not seriously materialize. Mintage estimates for many tax token run into the millions, this is high when compared to merchant tokens which typically have mintages below 1000.
Prior to state issue, there were locally issued tokens by private individuals and groups. These were mostly made of paper or cardboard, with some made of metal and wood. The earliest known non-state issued tokens were the tokens made in Illinois communities during the spring of 1933. They were short-lived and as unpopular as the forth coming state issues. Privately produced tokens from Washington State were issued in wood and cardboard and only were in service from May to August, 1935. They were soon replaced by state issued cardboard and metal tokens. In Ohio the state used punch cards instead of tokens and also issued a complex series of whole-cent receipts.
The first widely distributed state issued tokens were distributed by Washington State in May 1935. By the end of World War II tokens had been virtually discontinued. Missouri was the last to use tax tokens which lasted until 1961. Ohio discontinued use of the paper receipts in 1962.
Characteristics of Tax Tokens
Tokens came in denominations of Mills. A Mill is equal to 1/10th of a cent. They were also issued in fractions of a cent, such as, 5 Mills. Washington State issued tokens that were at values greater than the standard Mill.
The state tax tokens are found in many materials: aluminum, copper, brass, zinc, cardboard, fiber, and plastic. The tokens made of fibers, cardboard, and plastic come in a wide variety of shades. The design for all of the state issued plastic tokens is the same except for the name of the issuing state. Metal tokens were issued from about 1935 to 1940, fibers from 1941 to 1943, and plastics from 1943 and on.
Most of state-issued tax tokens are 22-23 mm in diameter or 16 mm in diameter. Many have some
form of center punched round, square, triangular, or cross shaped hole. The size of the punch varied in width or diameter from one or four millimeters. See figure 1 for examples of common tax tokens. There are many varieties in the letterings of the legends and the designs on the tokens. Several tokens exist without a center punch which they normally should have had. Others have off-center punches and double punches. These are a result of mistakes during the manufacture of the tokens.
Figure 1 – Colorado (aluminum), Oklahoma (fiber), Alabama (zinc), and Missouri (plastic) tax tokens.
Most state issues are still plentiful and are available in uncirculated condition. The state series makes a simple and compact collection, and one can still get most of them at a cost varying from 50 cents to a few dollars each in uncirculated condition. Coin Dealers, eBay, and Antique Malls are good sources of the tokens.
Good reference books on the subject:
U.S. State-Issued Sales Tax Tokens by Jerry F. Schimmel, 2nd Edition Revised, 1980.
United States Sales Tax Tokens and Stamps: A History and Catalog, by Merlin K. Malehorn and Tim Davenport. 1993.