MAY 3, 1921

West Virginia imposes first State Sales Tax…
HOW DID STATES MEET THEIR BUDGETS FOR 145 YEARS WITHOUT A SALES TAX?

token-1921-sales-taxBy the 1930′s most states followed West Virginia‚Äôs example in levying their own sales taxes. At that time, taxes were fractions of pennies over the sales price and were paid for with tokens. Illinois was the first to introduce tokens for a 3% sales taxes, but the state Supreme Court struck down the provision. Illinois re-issued them the next year anyway, followed by Ohio, California, and the other states. The tokens lasted through WW II and were phased out shortly thereafter. How did these states meet their budgets before a sales tax?