Category Archives: December 2011

It was 1935 and despite the poor economic times of that era new “emergency” taxes were being placed on many items that previously had gone untouched. The new surcharge taxes were only fractions of a cent on many items, but they were the beginnings of what have become ubiquitous state, county and city sales taxes. Retailers were required to collect what was sometimes a miniscule amount of tax on their sales and forward the money to the government. What seemed like a workable plan had a fatal flaw. There was no practical way to collect the money. The tax on a quart of milk for instance, was one mill, or one-tenth of a cent. The smallest circulating coin at the time was the cent, and with no way to make change the purchaser could be charged ten times the required tax for a single bottle. It was an irritant for the consumer and an embarrassment for the retailer.

Utah Sales Tax Token

In an effort to accommodate the situation several states made sales tax tokens in denominations of one to five mills that could be used for paying small amounts or for making change for a cent. Most were made of aluminum; others were brass, plastic or cardboard. In one instance the bottle cap for a quart of milk was actually a round cardboard disk printed with a denomination that could be used as a token for making change. Treasury Secretary Morgenthau repeatedly warned the states that were issuing sales tax tokens that they were illegal and promised that the government would issue a half-cent coin and a one-mill coin for general circulation. President Franklin D. Roosevelt reportedly suggested designs for the two coins; the half-cent was to have a hole in the center and the one-mill was to be square. The House Coinage Committee however never adopted the plan, and forced the Treasury to sit by while a total of 13 states eventually issued their own brand of sales tax tokens.

Missouri One Mill Tax Token

Although many of the tax tokens looked like money, traded like money and really were a form of money, the states managed to get away with issuing them, even though the federal law is specific in stating that anything that close to being “real” money was illegal. Secretary Morgenthau challenged the states, but never actually enforced the law against the tokens. They served a necessary role in the economy of the time and filled a void that was not being served by traditional government coin of the realm. Sales tax tokens are often encountered in old accumulations of coins. They are easily recognized by the name of the state that issued them, and the unusual denominations that are in mills. Some have the dates of when they were issued in the mid-1930’s. None has actually been used for over a half century, and today taxes have gone well beyond the need for such low denominations. A few collectors specialize in saving these curios of the past for their historic value. They are all relatively common and hundreds of different varieties are known to exist.