Sales tax tokens were made in great quantities starting in 1935 in order to give change for sales taxes. Sales tax resulted in the final price of items having fractions of a cent. For example, purchase of a $1.25 item, taxed at 3%, would cost $1.2875, or $1.28 and 3/4c. What to do? Rounding up to $1.29 would result in a "unfair" profit to the seller of 1/4c, but rounding down would be unfair to the seller by reducing the profit by 3/4c. The solution was to provide tokens denominated in fractions of a cent, or "mills" (1 mill = 1/1000 of a dollar, or 1/10 of a cent). So in the above example, the customer would pay $1.29 and receive 2.5 mills in tax tokens as change. If the next purchase came to $3.4325, the customer could pay $3.43 plus the 2.5 mills in tax tokens. As you can imagine, people did not like having to carry a second set of coins, and to further complicate matters, different states issued different tax tokens. The use of tax tokens declined and was finally discontinued in 1961, and people basically decided not to worry about fractions of a cent.
"Coinlike" tax tokens were issued by twelve different states (Alabama, Arizona, Colorado, Illinois, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Utah, and Washington state). Tokens were made of aluminum, copper, zinc, brass, plastic (in several colors), fiber, cardboard, and paper. 1 and 5 mills are the most common denominations, but other denominations include: 1/5 cent, 1 1/2 mills, and "Tax on 10c or less."
Many tax tokens are quite common, and can often be found in dealer "junk boxes" for as little as 10c. Others are scarcer, though due to low demand, they also show up in junk boxes from time to time. A few, such as the New Mexico 5 mill black fiber are truly rare, and worth up to $100 or so. Some "Provisional Issues" were made, which list the city as well as
the state. These are much scarcer than the state issues, but prices are still fairly low, the ones I've seen have been in the one-to-several-dollars range. Tax token "tickets" printed on paper were also issued by several states (including ones not listed above). I have not seen enough of these to get an idea as to value. It is easy to believe that many fewer paper items have survived than the metal and plastic tokens, but demand is probably not great enough to generate high prices for most items.
A listing of sales tax tokens appeared in the March 15, 1944 issue of Numismatic Scrapbook Magazine, and was later reprinted as "Sales Tax Tokens" by Emil Di Bella, a more complete work is "United States Sales Tax Tokens & Stamps". by M. K. Malehorn.
A related issue are the small vulcanized fiber "red point" and "blue point" tokens, which are ration tokens issued by the USA during WW II to make change for ration coupons. These were also issued in large numbers (1.1 billion red, 0.9 billion blue) so even though many were collected and destroyed after the war, they are quite common. The red is a bit more common than the blue, but both are readily available. Each token has two letters on it, and some people collect them by letter combination. Most of the letter combinations are quite common, but the red "MM" is a bit scarce, and the red "MV" is quite rare, and has sold on eBay for about $100. There was a great article about these tokens in Coin World ("Think 'Rationall'" by Jeff Stark, Aug. 18, 2003, p. 16).
Tax and ration tokens are fairly easy to find in dealer "junk boxes" and also show up regularly on eBay. I think there is an organization of tax token collectors, but I don't have contact information for them. There is a "ration token" society listed on my list of token organizatons.
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