For sale is a 1939 ARIZONA STATE SALES TAX TOKEN. This aluminum sales tax mill token would have been used to pay a sales tax of one-tenth of a cent. The 16mm diameter token has text on one side to explain its use: “To make change for correct sales tax payment”. The other side of the token features Arizona’s state seal and motto: “Ditat Deus”, Latin for God enriches. An interesting historical collectible and a reminder of the government’s insatiable appetitive for new forms of tax revenue.
After the October 1929 global economic crisis struck the United States, State governments searched for novel ways to collect taxes due to plummeting revenues due to high unemployment and defaults on property taxes. Despites diminished tax revenue, States were pressured to spend on relief measures for the indigent and the unemployed. This combination sparked the implementation of sales taxes and by 1933, 12 different States adopted a sales tax. The States that used sale tax tokens were Alabama, Arizona, Colorado, Illinois, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Utah, and Washington.
Sales tax tokens were necessary to be able to charge tax on small purchases. For example, how can you collect a three percent tax on a ten cent sale? The sales tax would be 0.3 cents (less than a penny). Sales tax tokens allowed the merchant to accept 11 cents for a ten cent sale and then provide change with sale tax tokens. Tokens allowed the merchant to collect the sales tax on each transaction. Token denominations were usually a tenth of a cent (or 1/1000th of a dollar). A token denomination was known as a mill. In the above example, the
purchaser would receive 7 mills of sales tokens from the 11 cent sale (0.7 cents change). State issued 1 and 5 mills tokens were the most common denominations, but other denominations include: 1/5 cent, 1 1/2 mills, and “Tax on 10c or less.”
purchaser would receive 7 mills of sales tokens from the 11 cent sale (0.7 cents change). State issued 1 and 5 mills tokens were the most common denominations, but other denominations include: 1/5 cent, 1 1/2 mills, and “Tax on 10c or less.”
As you can imagine, people did not like having to carry a second set of coins. Sales tax tokens were widely regarded as a nuisance by consumers and were replaced in fairly short order by the bracket system of sales tax collection, which averaged out the tax on small sales. By the end of the 1930s, sales tax token use was eliminated in most of the issuing states, with sales tax tokens lingering in Missouri until late in the 1940s.
