Sales Tax Token
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  by Emil Di Bella, a more complete
work is, by M. K. Malehorn.