States with Tax Exemptions on Gold
Alaska, Arizona, Delaware, New Hampshire, Oregon, Montana, South Carolina, and Utah do not impose taxes on gold. Nevada, Wyoming, Idaho, Washington, Wisconsin, Maine, North Carolina, South Dakota, Tennessee, Virginia, West Virginia, Hawaii, Mississippi, Kentucky, and Indiana have the lowest taxes on gold.
Utah Sales Tax and Exemptions
The state of Utah requires the collection of sales taxes on certain products sold by APMEX and delivered to a Utah address.
As defined in state code 59-12-104(50) and (51), the following bullion and numismatic items are EXEMPT from sales tax when shipped to a Utah address: Gold, silver, or platinum bullion bars, ingots, medallions, and decorative coins refined to a purity not less than .500 fine, sold according to precious metal content and not form; Coins that constitute legal tender.
All other bullion or numismatic items and accessories sold are subject to Utah state sales tax.
Tax Exemptions and Sales Tax on Precious Metals
Sales tax will NOT be levied on gold, silver, platinum or palladium. See the status of your shipping address to find out if you’ll need to pay sales tax.
To date, 41 states have eliminated sales taxes on gold and silver bullion. The District of Columbia also taxes physical purchases. States that collect taxes erect barriers by raising transaction costs. Imagine if a grocery clerk charged a 35 cent tax to break a $5 bill. Silly, right? But that’s essentially what Arkansas’ sales tax on bullion does.
Tax Exemptions and Rates
Which states have no tax on precious metals? Oregon, Alaska, Delaware, New Hampshire, and Montana have no sales tax on any precious metals purchases.
There are currently five states that do not impose any sales tax. Thirty-four other states have full or partial sales and use tax exemptions for retail sales of coins and precious metals ingots. Sales taxes must be collected on currencies containing gold or silver that are not recognized mediums of exchange.
Taxes on Precious Metals Purchases
Levying taxes on precious metals purchases is illogical and inappropriate. So far, 37 states have no sales taxes or have full or partial exemptions from retail sales tax on coins and bullion.
If all 50 states start using gold and silver instead of Federal Reserve notes, the Federal government would lose control over state money. In 2023, Mississippi became the 42nd state to introduce full or partial tax exemptions on retail sales of precious metals and currency. Similar exemptions have been introduced in other states as well. Unfortunately, the exemption was not retained in Kentucky after being approved by the House but not the Senate.
Tax Considerations for Precious Metals Investments
Do you pay taxes when buying precious metals? When buying precious metals, the only tax you should think of is the VAT (Value-Added-Tax). When buying investment gold (aka coins and cast or minted bars), you pay no taxes because, in most countries, investment gold is VAT-free. Buying silver, however, is a different story.
The IRS considers precious metals as collectibles, and thus they may potentially be taxed at the maximum collectible capital gains rate of 28 percent. It is important to note, however, that these capital gain taxes will not be assessed until one sells the metal.
There is a relatively easy way to minimize the tax implications of owning gold and other precious metals. For individual investors, Sprott Physical Bullion Trusts may offer more favorable tax treatment than comparable ETFs. Since trusts are based in Canada and are classified as passive foreign investment companies (PFIC), U.S. non-corporate investors are entitled to standard long-term capital gains rates by selling or repaying their units.
At a national level, the IRS classes gold, silver, and other precious metals as capital assets, and so any long-term returns made on your investment will attract capital gains tax. To further complicate the situation, the IRS classes precious metal as a collectible item rather than a pure investment, and this places it into a higher tax rate than most other investment products. Fortuntely, there is a relatively easy way to minimize the tax implications of owning gold and other precious metals. Individual investors, Sprott Physical Bullion Trusts, can offer more favourable tax treatment than comparable ETFs. Because trusts are based in Canada and are classified as Passive Foreign Investment Companies (PFIC), U.S. non-corporate investors are eligible for standard long-term capital gain rates for the sale or redemption of their holdings.