Dorri Partain
Contributor

How do you pay a fraction of a cent?

This was the dilemma when the Missouri Legislature voted to begin collecting sales tax on purchases, adding a 1% tax for every dollar spent beginning on August 27, 1935. The problem was how to pay taxes on purchases for less than one dollar. The solution was to create a token, or “mill” that customers could use to pay the tax or as a receipt for the tax payment.

The first incarnation of the Missouri Sales Tax Receipt was produced from a sturdy cardboard, similar in thickness and size used to seal glass milk bottles, earning the nickname “milktops”. On the reverse of the receipt was wordage that explained exactly where the tax would be spent: “This receipt shows that you are helping to pay for old age pensions, support of public schools, care of poor, insane, tubercular patients in state hospitals and relief of needy unemployed in the state of Missouri.”

Valued at 0.0001 of a cent, the mill could only be used to pay tax, not to purchase any goods. West Virginia was the first state to begin changing sales tax in 1921, and by the 1930’s, a dozen additional states had followed suit. The tokens could only be used in the state that produced them, as they were clearly marked with the name of the state and not transferable.

By 1937, the cardboard tokens were replaced by a metal version made of zinc. The Joplin, Mo. Chamber of Commerce lobbied the state to use zinc from nearby mines and 33 million mills were produced and in circulation until 1943, when metals were needed during World War II.

The replacement was produced from plastic, with a one mill value as red, and a five mill value in green. The five mill reduced the amount of tokens tax payers needed to have on hand – a six mill tax could be paid with a 1 and 5 mill instead of 6 tokens. Likewise, if paying a one mill tax with a five mill, the customer would get four tokens in return. Customers could also pay the tax in pennies, then get the overage paid back in mills. Tokens were only available through merchants and not offered by banks.

While sales tax continues to be collected by merchants, the mill system was officially ended on December 31, 1961.