MSN: Gold and Silver Investing Guide

Above, the entrance to the National Money Show in Phoenix, Arizona. Photo by Armand Vaquer.

A few years ago, the National Money Show was held in Phoenix, Arizona. This was great for two reasons: first, it was not too far from home and, second, there is no sales tax on gold and silver in Arizona.

Unfortunately, I cannot say the same about the sales tax in New Mexico. The state charges sales tax on gold and silver coin purchases.

MSN posted an investing guide that discusses what states that don't have a sales tax on coin purchases.

They begin it with:

Gold and silver investment strategy: As gold and silver prices climb, more investors are stepping into the physical precious metals market, as people are looking for stability during uncertain times. With gold trading above $5,100 per ounce and silver above $82 per ounce as of Tuesday, for many buyers, the surprise isn’t the spot price, it’s the sales tax.

A the old saying goes: Buyer beware!

To read more, go here. 

Do You Know Your State’s Sales Tax Exemption Status?

Above, the National Money Show in Phoenix this year. Photo by Armand Vaquer.

One of the things that irritate coin and precious metals collectors and investors is that some states levy sales taxes on those purchases.

A handful of states have enacted exemptions. Unfortunately, my state of New Mexico is not one of them. 

Do you know your state's sale tax exemption status?

That question is posed in an article from Numismatic News.

It begins with:

This past week, a new major coin show debuted in Nashville, Tenn. – the International Money Expo. The impetus to create this convention was the state’s adoption last year of a sales and use tax exemption on retail sales of precious metals, bullion, coins, and currency.

The show was well promoted within the numismatic industry. It included a dealer and early bird-only trading day on Thursday, a public convention on Friday and Saturday, and then another dealer and early bird trading day on Sunday.

The dealer trading room last Thursday (Oct. 26) was crowded and active, although many of the dealers with tables were only set up to buy and not to sell inventory. Dealer set-up in the convention hall began late Thursday, which continued to be busy.

Decent activity on the convention floor continued for much of Friday (Oct. 27). But, as is common at major shows, some dealers began to depart as the day went on. There were even more empty dealer tables on Saturday.

While dealer-to-dealer trading was active, there was relatively limited public attendance at this show. For most of the day Saturday, activity at dealer booths was minimal. In my mind, part of the reason for relatively light public attendance was that a high percentage of Tennessee residents do not yet realize that the state has adopted the sales and use tax exemption for precious metals, bullion, coins, and currency.

Next year, public attendance could be much larger if more promotional efforts make sure to mention the existence of the sales and use tax exemption. 

Earlier this year, I attended the National Money Show in Phoenix, Arizona. Fortunately, I knew ahead of time that Arizona has a tax exemption on coins. 

To read more, go here.

New Mexico Needs To Exempt Precious Metals From Sales Tax

Above, the 2023 National Money Show in Phoenix, Ariona. Photo by Armand Vaquer.

New Mexico is one of the few remaining states that imposes a state sales tax on precious metals. 

The neighboring states of Arizona, Utah, Colorado and Texas don't. New Mexico citizens who want to buy gold, silver or other precious metals have to go to these states to avoid paying any sales taxes. 

It came in very handy for me last March to buy coins at the National Money Show in Phoenix, Arizona since there's no sales tax on gold and silver in Arizona. The next National Money Show will be held next March in Colorado Springs, Colorado, another neighboring state that exempts gold and silver from any sales tax.

It is ridiculous that New Mexico still imposes a sales tax on gold and silver when surrounding states don't. 

If New Mexico's legislature really wants to do something that benefits people, they should pass a law exempting precious metals from any sales taxes instead of wasting time on B.S. issues like abortion and tyrannical "green" energy proposals.

Silver Dips Below $23.00/toz; More States Consider Sales Tax Exemptions On Precious Metals

Silver dipped below $23.00/toz yesterday and that's where it is as we are at the end of the week.

That doesn't bother me, however. Whenever silver's spot prices drop, I see that as opportunities to buy more of it. As the old adage says, "Buy low, sell high!"

Speaking of buying, New Jersey has introduced legislation to end sales taxation on precious metals following Mississippi's law ending sales tax on precious metals went into effect.

According to Money Metals Exchange:

Assessing a state sales tax on the purchase of gold and silver is becoming an outmoded, indeed outrageous, practice – but a small number of U.S. states still engage in it.

Several of the remaining seven states that tax all precious metals purchases are presently considering enacting their own exemptions, and just this week Mississippi bureaucrats formally stopped slapping these taxes on citizens.

A culmination of a four-year campaign by Money Metals Exchange and the Sound Money Defense League, Mississippi Governor Tate Reeves signed Senate Bill 2862 in April and, as of July 1, all purchases of gold, silver, platinum, and palladium coins, bars, and rounds are fully exempt from sales tax in the Magnolia State.

Mississippi follows Virginia (2022), Tennessee (2022), Ohio (2021), and Arkansas (2021). Meanwhile, New Jersey and Wisconsin could be the next two states to remove sales taxes from the monetary metals.

In fact, members of the New Jersey assembly unanimously voted last week to pass A5294, sending the bill to the state senate for concurrence. And Wisconsin is expected to hold hearings on an exemption bill in September.

Hawaii, Kentucky, New Mexico, Vermont, Maine, New Jersey, and Wisconsin are the only remaining full sales tax states – and none of them border each other. That means these states are surrounded by tax-exempt states, further increasing the pressure to act.

That's certainly one of the reasons Mississippi passed its sales tax exemption this year. It's embarrassing to the politicians when they see that citizens are taking their business to other states.

Citizens in Hawaii, Kentucky, New Mexico, Vermont, Maine, New Jersey and Wisconsin need to contact their state representatives and get them on the ball to end sales taxation on precious metals.

To read more, go here. 

Alaska May Join States Allowing Gold and Silver As Legal Tender

Above, Alaskan totem poles. Photo by Armand Vaquer.

Alaska may become the latest in a growing number of states to allow gold and silver as legal tender if a bill, just passed the House, gets passed by the senate and signed by the governor.

The Anchorage Daily News reported:

JUNEAU — In the final days of the legislative session, the Alaska House passed a bill that would allow gold and silver to be used as legal tender.

House Bill 3, introduced by Big Lake Republican Rep. Kevin McCabe, would allow business owners to decide if they want to accept the precious metals as currency. The coin or bar would need to be refined and its value would need to be authenticated, meaning gold dust or nuggets could not be used.

McCabe told the House State Affairs Committee earlier in the session that one of his constituents suggested the idea to him because they did not trust the national banking system. More than 10 states have passed similar bills, including Arkansas in April.

The bill specifically exempts local governments from collecting sales tax when U.S. dollars are exchanged for gold and silver. Sales taxes on purchases made with the bullion would still apply. 

To read more, go here. 

Mississippi Now Makes Gold & Silver Tax-free

Mississippi has joined the ranks of states exempting gold and silver from state sales taxes.

This is something that New Mexico should be doing, but partisanship by the Democrat majorities in the legislature are more fixated on abortion and other phony issues rather than doing something to benefit citizens. 

From WTOK-TV:

 MERIDIAN, Miss. (WTOK) - Governor Tate Reeves signed SB2862 into place last week.

This law will make gold and silver coins and bullion tax-free. Mississippi is the 43rd state to intact a law of this nature. News 11 spoke with one local business owner who says our area has several gold and silver coin collectors, as well as bullion buyers, that will benefit from this law. He also states buying gold or silver can help keep a hedge against inflation. Where the dollar may decrease in value, gold and silver can go up.

To read more, go here. 

Gold and Silver Could Soon Be Sales Tax Exempt In New Jersey

There's only a handful of states, New Mexico being one of them, who still applies sales and use taxes to gold, silver and other precious metals purchased as investments during this time of high inflation and bank collapses.

New Jersey may soon be joining a majority of states who have eliminated the sales tax on precious metals.

According to Shore News Network:

TRENTON, NJ – A the economy continues to suffer and inflation continues to rise under the Presidency of Joe Biden, many are turning to investments in precious medals to protect their assets.

Under existing New Jersey law, those investments, unlike other credible financial investments are subject to state sales and use tax.

The bill, A5294, would exempt legitimate gold, silver and other precious metal ‘bullion’ from state sales tax. It would also cover the sale of gold coins purchased for investment purchases.

As defined in the bill, “investment metal bullion” means any elementary precious metal that has been put through a process of smelting or refining, including, but not limited to, gold, silver, platinum, and palladium, and that is in such state or condition that its value depends upon its contents and not its form.  

The bill also defines “investment coin” as any numismatic coin manufactured of gold, silver, platinum, palladium, or any other metal, including non-precious metals, and having a fair market value of not less than $1,000. 

It sounds to me, under this bill, coins not having a value of at least $1,000 will not be exempt from the sales tax. Not everyone can afford coins over $1,000. Most investment coins minted today are below $1,000 in value. If my reading is correct, the bill should be modified so that all investment coins of precious metals should be exempted. The change in the law would be useless for the average citizen unless modified.

To read more, go here.

No Precious Metals Sales Tax In Arizona

Above, a 1976 Kennedy Gem Proof Silver (40%) half dollar. Photo by Armand Vaquer.

Unlike New Mexico and a few other states, Arizona does not levy sales taxes on gold, silver bullion and other precious metals.

According to Golden Eagle Coins:

Bullion Sales Tax in Arizona

According to Arizona law, www.azleg.state.az.us/ars/42/05061.htm, the sale of all precious metals and bullion associated with those metals is exempt from sales tax. Precious metals include gold and silver. In addition, any product made from metal used as money, is also exempt from sales tax when bought and sold in Arizona. This ease of restrictions on the markets of gold and silver bullion has made Arizona a very attractive place for all precious metal dealers. It allows those who wish to make a smart investment, do so without any worry of expense or fees.

This is great since I am heading to the National Money Show this weekend in Phoenix.  

Mississippi Legislature Votes To End Sales Tax On Precious Metals

New Mexico is one of the few states left that imposes a sales tax to precious metals on investors. The list is getting smaller as the Mississippi state legislature (both houses) voted overwhelmingly to end the practice.

The legislation is now headed for the governor's signature.

FXStreet reported:

State lawmakers of both houses have just voted overwhelmingly to exempt physical gold, silver, platinum, and palladium coins and bullion from the Mississippi state sales tax, sending the bill to Governor Tate Reeves (R) for his signature.

Senate Bill 2019, sponsored by Sen. Chad McMahan (R – 6), passed yesterday out of the full senate by a vote of 47-2. This afternoon, Rep. Jody Steverson’s identical House Bill 1661 passed out of the full house chamber on an overwhelming voice vote.

Backed by the Sound Money Defense League, Money Metals Exchange, and in-state Mississippi dealers and investors, the legislative effort built upon last year's momentum. In 2022, a similar sales tax exemption bill had passed out of the Mississippi House of Representatives overwhelmingly but it missed a deadline in the Senate needed to receive a hearing.

If Gov. Reeves signs the bill next week (or if he simply chooses not to veto it), Mississippi will become the 43rd state to exempt sales of sound money from state sales tax. The effective date is July 1, 2023.

Every one of Mississippi’s neighbors (Alabama, Louisiana, Kentucky, and Tennessee) have already stopped taxing the monetary metals. Most recently, Tennessee ended this tax in 2022, and Arkansas and Ohio eliminated this tax in 2021. 

If the New Mexico legislature can get on the ball and eliminate the sales tax on precious metals, they will be joining a vast majority of states who have previously ended the practice.

To read more, go here.

Bullion and Coin Sales Tax Exemption Prospects In 2023

A big majority of states don't impose sales taxes on bullion and coins where they are considered investments. Unfortunately, the state I live in is New Mexico, who imposes sales taxes on bullion and coins.

The legislature, dominated by left-wing Democrats, are more interested in abortion and harassing gun owners and coming up with all kinds of ridiculous legislation during this legislative session.

Other states are trying to end sales taxes on bullion and coins, but there are some who are putting up roadblocks and tabling bills.

Numismatic News posted an article on the prospects of tax exemptions this year.

They begin it with:

In 2022, the state of Tennessee was the only state to adopt an exemption from sales taxes on retail sales of precious metals bullion, coins and also currency. Beyond that, the state of Alabama extended the expiration date of its existing bullion/coin/currency sales tax exemption from 2023 to 2028. In addition, several state legislatures that had bills introduced to revoke existing exemptions all adjourned without taking action on any of them.

Currently, there are five states that have no state sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon). There are an additional 36 states that have adopted complete or partial sales tax exemptions on the retail sales of bullion/coins/currency. The state of Nevada, by regulatory action, exempts precious metals bullion and coins that do not sell for more than 50 percent above face value. There are eight states, along with the District of Columbia, that still require sales taxes to be collected on retail sales of such products: Hawaii, Kentucky, Maine, Mississippi, New Jersey, New Mexico, Vermont and Wisconsin.

In 2022, there were sales tax exemption bills in the legislatures of Hawaii, Kentucky, Mississippi and New Jersey that did not become law.

Now that 2023 is here, there are some renewed efforts to obtain bullion/coin/currency exemptions in several states.

To read more, go here. 

Sales Tax On Precious Metals

In general, states do not collect sales taxes on investments. But, unfortunately, some states haven't gotten the memo and are still applying sales taxes on precious metals within their state and through online purchases of gold and silver, even though those should be considered investments.

My former state of residency, California, and current state of residency, New Mexico, imposes state sales taxes on precious metals even if purchases are made online. This is an atrocious policy.

I have asked a new New Mexico State Senator to author a bill to repeal New Mexico's sales tax on precious metals. So far (to the best of my knowledge), 42 states have repealed sales taxes on precious metals.

JM Bullion, one of favorite coin dealers, has an article on the practice of imposing state sales taxes on precious metals:

With the prevalence of online precious metals dealers these days, people often wonder if they are required to pay sales tax on precious metals purchases, especially purchases made online. Here we will outline some information on this issue for informational purposes only. Nothing contained here should be construed as tax advice, and any questions relating to any tax matters should be directed to your CPA or tax adviser.

Whether or not one must pay sales tax on a precious metals purchase depends on where you are located. Some states require the collection of sales tax while others do not. Some states also may charge sales tax up to a point, and there may be exemptions beyond that point.

For example, a purchase of less than $1,000 may be subject to sales tax but above $1,000 may not be subject to the tax. It is important to also keep in mind that tax laws can change and, therefore, the information contained here is believed to be accurate, but no warranties are being made as to the accuracy. One should always conduct their own due diligence.

At the heart of the matter is whether or not gold, silver and precious metals should be viewed as an investment or even as a currency, or if they are simply just like any other physical property such as clothing, automobiles or furniture. Although it seems that the notion of gold, silver and other precious metals purchases being viewed as an investment and thus not be subject to sales tax may be gaining some traction, many states do, in fact, still charge sales tax on precious metals.

It is important, therefore, to determine if your state charges sales tax on precious metals. The best way to find out about your specific location is to consult your CPA or tax adviser. One can also look to your state’s department of revenue for answers regarding these issues.

Here is a basic guide that outlines some of the states and their policy on precious metals sales tax. For more information, you can view this helpful state by state breakdown.