Tax Token Info

I posted the photo of the tax token on a forum I read and a fellow member pointed me in the direction of a website where I've snagged the following information:

Immediately following the great depression, income taxes plummeted and property tax defaults increased to the point at which governments were faced with severe economic restraints. In order to generate revenue, sales taxes were debated in both state and national governments. The state of West Virginia was the first American state to enact a sales tax law in 1921,followed by Georgia in 1929. By 1940 over thirty states were using sales tax as a temporary means of increasing state coffers. In spite of promises of a temporary measure, the sales tax is here to stay. How long before we also pay a federal sales tax, in addition to state and local sales taxes?

During the great depression a penny was still a coin of value. The states in their rush to embrace sales taxes , did not immediately provide a means of collection. Merchants were left on their own ,but the tax had to be collected. Many people resented the fact that even on a small purchase a sales tax had to be paid. The problem was especially bad for five and dime stores which were popular during and after the great depression. Several different methods of collecting the onerous sales taxes were tried. The public demanded a way of making change for the cent in order to pay the sales tax on a small purchase. Punch cards, chits, and tokens were the final solution, attempted in the beginning by local merchants, and soon followed by twelve states that issued tokens. By making change for a cent a customer need pay only his fair share of the unpopular sales tax on small purchases. Kewanee, Illinois businessmen have the distinction of producing the first sales tax tokens. The cardboard or metal tokens were usually of one-fourth cent denominations and used to collect the 3% sales tax then in effect. Dozens of individual merchants and small towns quickly manufactured these tokens. Meanwhile federal government authorities charged that issuance of fractional cent tokens was an illegal coinage of money, forbidden under federal laws. This argument continued until 1935.In July of that year President Roosevelt ordered the Treasury Secretary to appear before congress. Henry Morgenthau Jr. proposed the issuance of one and one half mill coins. The proposal promptly failed and the legality of tokens was never fully resolved.

Sales tax tokens were made from, aluminum, brass, copper, cardboard, pressed paper, pressed cotton lint fiber, plastic and zinc. There are many sizes and shapes, and a few attempts at artistic design. A number of sales tax tokens have center holes of various sizes and shapes. Triangular, square and star shaped center hole punches are found in addition to simple round holes. The variation in shape, size, color, denominations, local issues, and state productions added to composition ensure an almost endless opportunity to collectors. Sales taxes are and were traditionally, a hot political issue. The politics of taxation has divided nations for millenia. Pinbacks, wooden nickels, cards, stickers and even grafitti on tokens themselves are also highly collectable items. Production numbers range from the millions to the extremely rare, defying even the most persistent collector.

Tom Holifield, LM ATTS

http://www.geocities.com/whistlestopstudio/whatis.htm