Democrats target tax breaks for coin deals

5/21/2005

COLUMBUS Ohio Democrats are trying again to repeal a state law that granted a tax break to coin dealers such as Tom Noe.

State Rep. Peter Ujvagi (D., Toledo) introduced a bill yesterday to eliminate the 16-year-old sales-tax exemption for investment coins and bullion.

As we work to clean up the abuses of Coingate, where new revelations of questionable activity seem to emerge daily, it is time for us to eliminate this special tax break, Mr. Ujvagi said in a written statement.

Mr. Ujvagi tried unsuccessfully in 2003 and this year to repeal the so-called Noe amendment.

The tax break has deprived the state of $34 million in tax revenue and county governments $6 million since 1992, said Mr. Ujvagi, citing an estimate from the state Department of Taxation.

The tax break does not apply to commemorative coins and other collectibles, Mr. Ujvagi said.

If the Noe amendment is repealed by July 1, the additional tax would generate $6.9 million, Mr. Ujvagi said.

Over the last two years, I have repeatedly tried to eliminate this tax break and utilize the income to support higher education, transition programs for women, urban and rural university programs, and funding to enable us to provide reduced tuition at targeted universities. The majority Republicans have repeatedly thwarted those efforts, he said.

House Speaker Jon Husted (R., Kettering) remains opposed to Mr. Ujvagi s proposal, said spokesman Karen Tabor.

We would continue to support an environment to allow Ohioans to invest. We remain opposed to measures that would tax those investments, Ms. Tabor said.

Even if Mr. Ujvagi s bill goes nowhere, Senate Democats are expected to offer it as an amendment to the state operating budget bill.

House Republicans tabled Mr. Ujvagi s amendments on April 12.

In the late 1980s, Mr. Noe hired two lobbyists to convince the legislature to exempt investment coins and bullion purchases from the state sales-tax base.

The lobbyists were Democratic House Speaker Vern Riffe s former high-ranking aide, Thomas Winters, and Neil Clark, a former GOP Senate staffer.

The sales-tax exemption was signed into law by Democratic Gov. Richard Celeste in 1989.

Also yesterday, two staff members of Sen. Marc Dann attended the Ohio State Numismatic Association Coin Show at the Franklin County Veterans Memorial.

Mr. Dann, who represents a district in suburban Youngstown, has been the chief Democratic critic of the state s $50 million investment in rare coin funds controlled by Mr. Noe s Capital Coin.

The Senate staff members were doing research on why people invest in coins and how coins are graded. They also picked up business cards from coin dealers.

Contact James Drew at:jdrew@theblade.comor 614-221-0496.