Why America once used tiny tokens to pay taxes on small purchases

History · Published 29 September 2026 Swipe more like this →

In short: During the economic crises of the twentieth century, the introduction of sales taxes created a practical dilemma for consumers. Because even a single penny represented an overpayment on items costing less than a dollar, states turned to a unique solution: sales tax tokens.

For the majority of American history, sales taxes did not exist. Their widespread adoption was a direct response to the economic instability of the twentieth century. However, this shift introduced a technical complication: calculating a fractional tax on small transactions.

To solve the problem of overcharging customers on purchases under one dollar, various jurisdictions implemented sales tax tokens. These small, physical tokens allowed for the precise payment of tax amounts that were smaller than the smallest unit of legal currency, ensuring that consumers were not forced to overpay on minor goods.

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