People in Georgia, Kentucky, Wisconsin, and Kansas may soon be able to buy valuable metals with lower taxes if new bills that support metals become law in 2024.
Precious metals would not be subject to state sales tax (in Kentucky and Wisconsin) or state income tax (in Georgia and Kansas). This month, all four states filed or reintroduced bills that would do this.
These bills, House Bill 101 and Senate Bill 105, will be voted on by politicians in Kentucky this year. From August of this year on, there would be no more state sales tax on gold, silver, platinum, and palladium metal if the bills are passed. Assembly Bill 29 and Senate Bill 33 in Wisconsin would both do similar things and also get rid of the sales tax on buying copper coins.
Gold and silver are one of the only types of assets that are subject to sales taxes, according to people who support these bills. Stocks and bonds, on the other hand, don’t have to be taxed. The Sound Money Defense League recently said more about this:
“Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is ‘consuming’ the good. Precious metals are inherently held for resale, not ‘consumption,’ making the imposition of sales taxes on precious metals illogical from the start.”
It makes sense for Kansas and Georgia to take the next step toward making sound money easier to use by getting rid of sales taxes on gold. In Georgia, House Bill 895 and Senate Bill 303 would get rid of state capital gains taxes on precious metals. This would leave only the federal capital gains tax on income from owning gold or silver.
The two bills in Kansas also make it clear that gold and silver are legal tender in the state. They also make sure that people can choose to use real metal as money, which creates a fairly free market for money:
“The purchase, sale or exchange of any type or form of specie shall not give rise to any tax liability of any kind… Unless expressly provided by statute or by contract, no person shall have the right to compel any other person to tender specie or to accept specie as tender.”
A lot of people say that the income tax on rare metals is like a second tax on top of inflation. “Printing money is just taxation in a different form,” says Peter Schiff. This hidden inflation tax affects everyone’s cash, not just people who trade in precious metals. People who make a small capital gain on gold or silver may have to pay a second, clear tax bill, depending on where they live. This is the case even if their gain is small.
By looking at these bills, these states will be adding to the long and growing list of places in the US that give some kind of tax break for precious metals. Some states, like Missouri and Oklahoma, put forward bills last month that would also exempt rare metals from state income tax. Oklahoma and Florida went one step further and also thought about bills that would set up gold depositories in every state. This would help states have good money policy.
More states are taking steps to protect their people from the Federal Reserve’s money policies that destroy wealth, which shouldn’t be a surprise. The recent stretch of high inflation is a stark warning of how important money is to economies in the developed world. People are the ones who suffer when spending increases and the government’s debt gets out of hand, lowering the value of money. Luckily, as more states pass laws that make investing in valuable metals cheaper, owning gold and silver becomes a better way to protect yourself from this hidden tax. If the bills in Kansas, Kentucky, Georgia, and Wisconsin become law, they will give the people who live in those states a safer financial future.