Alabama Sales Tax Token – 1


1 in stock


From the state of Alabama, USA. Circa 1930’s. Measures 2cm diameter.

Sales tax tokens were fractional cent devices used to pay sales tax on very small purchases in many American states during the years of the Great Depression. Tax tokens were created as a means for consumers to avoid being “overcharged” by having to pay a full penny tax on purchases of five or ten cents. Issued by private firms, municipalities and by twelve state governments, sales tax tokens were generally issued in multiples of 1 mill or one tenth of a cent.

Prior to WWI, only two countries Mexico and Philippines made use of a general sales tax for national finance. In 1921 in the USA there was a concerted effort to implement a 1% national sales tax by attaching it to the 1921 national revenue bill and 1922 legislation providing for a soldiers’ bonus. These proposals were defeated, but the state of West Virginia implemented a 1% sales tax of its own in that same year. Improving economic conditions throughout that decade of the 1920’s would leave West Virginia’s use of a sales tax unique among the 48 American states.

In October 1929 the global economic crisis struck the United States. The Great Depression of the 1930’s. Unemployment skyrocketed, income tax revenue plummeted and defaults on property taxes spiked. By 1933 there were twelve states that issued sales tax tokens: Alabama, Arizona, Colorado, Illinois, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Utah, Washington.

Generally regarded as a nuisance by customers, they were replaced quickly by the bracket system of sales tax. By the end of the 1930’s token use was eliminated. Issued in a variety of materials: cardboard, brass, bronze, aluminium, pressed cotton fibre and plastic, mintages were high, but as these little tokens approach 90 years old, they have become collectable.