West Virginia to end sales taxation on gold and silver

Many argue that purchasing bullion coins, like this $50 gold Buffalo, is no different than “purchasing” two ten dollar bills with a twenty dollar bill at the bank. (Image courtesy of The United States Mint)

By unanimous vote on March 8, the West Virginia Legislature approved Senate Bill 502, originally introduced by Sen. Craig Blaire (R-Martinsburg), which called for the exemption of taxation on sales of investment metal bullion and investment coins. On March 27, West Virginia Gov. Jim Justice signed the bill into law. The law will go into effect on July 1.

The bill defines investment metal bullion as “any elementary precious metal which has been put through a process of smelting or refining, including gold, silver, platinum, and palladium, and which is in such a state or condition that its value depends upon its content and not its form. Investment metal bullion does not include precious metal which has been assembled, fabricated, manufactured or processed in one or more specific and customary industrial, professional, aesthetic or artistic uses.”

Further, it defines investment coins as “numismatic coins or other forms of money and legal tender manufactured of gold, silver, platinum, palladium or other metal and of the United States or any foreign nation with a fair market value greater than any nominal value of such coins. Investment coins does not include jewelry or works of art made of coins, nor does it include commemorative medallions.”

In 2011, Utah became the first state to recognize gold and silver coins issued by the United States Mint as official money. Then, in 2013, Texas and Louisiana enacted laws to eliminate state sales tax on gold and silver bullion. Nearly a dozen other states are considering, or have already introduced, similar bills, while 37 have already exempted sales of gold, silver, platinum, and palladium bullion and money from taxation.

In a report from the ICTA (www.ictaonline.org) that discusses the SCOTUS Wayfair Decision, it states, “that unless a state has (and maintains) an exemption, consumers who currently buy across state lines will now have to pay sales-taxes on purchases from out-of-state dealers, even if the dealer is located in a state with an exemption.” This decision makes it that much more important for states to maintain and expand their work in this area to reduce the risk of additional sales tax burdens on collectors and investors. ICTA has several resources available at its website for members to download on this subject.