By Stefan Gleason – Money Metals Exchange ……
Both houses of the Tennessee legislature yesterday overwhelmingly passed bills that would make the Volunteer State the 42nd state in the U.S. to remove sales taxes from constitutional sound money (i.e., gold and silver).
Tennessee’s House Bill 1874 and Senate Bill 1857, introduced by Representative Bud Hulsey (R-2) and Senator Frank Niceley (R-8), now head to Governor Bill Lee (R) for approval. The new precious metals sales tax exemption will take effect immediately upon the Governor’s signature.
Overwhelming grassroots support appears to have tipped the balance in this long-running effort in Tennessee. During today’s Senate vote, Senator Janice Bowling (R-16) commented, “I’d like to thank the senator for carrying this bill and also half of the state of Tennessee that contacted us!”
Backed by the Sound Money Defense League, Money Metals Exchange, and grassroots activists and coin dealers in Tennessee, the new law will allow Tennessee investors, savers, and small businesses to acquire precious metals without being slapped with sales and use taxes which, including local taxes, have ranged from 8.5% to 9.75%.
Lead sponsor Hulsey said, “I’ve been working to free gold and silver from sales taxes in Tennessee since my kids were in elementary school. The Sound Money Defense League, in-state dealers, and folks all across Tennessee made their voices heard and helped get this bill across the finish line.”
Meanwhile, similar bills have recently been under consideration in Kentucky, Mississippi, Hawaii, and New Jersey, as the nation’s inflation problem expands and as the national backlash against taxing constitutional money continues.
Including Tennessee, 42 U.S. states now fully or partially exempt gold and silver from the sales taxes. That leaves just eight states and the District of Columbia as jurisdictions that still harshly penalize citizens seeking to protect their savings against the serial devaluation of the Federal Reserve Note.
States have been removing sales taxes from monetary metals for the following reasons:
*** Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. States do not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments, so it makes no sense to tax monetary metals.
*** Levying sales taxes on precious metals is illogical because gold and silver are inherently held for resale. Sales taxes are typically levied on final consumer goods. Precious metals are inherently held for resale, not “consumption,” making the application of sales taxes on precious metals illogical and especially inappropriate.
*** Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers in states with precious-metals sales taxes often take their business to neighboring states that have eliminated or reduced sales tax on precious metals. Investors can easily avoid paying $136.50 in sales taxes, for example, on a $1,950 purchase of a one-ounce gold bar. Therefore, levying sales tax on precious metals harms in-state businesses, which lose business to out-of-state precious metals dealers. Coin conventions also tend to avoid the sales tax states.
*** Taxing precious metals is harmful to citizens attempting to protect their assets. Purchasers of precious metals aren’t fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals as a way to preserve their wealth against the damages of inflation. Inflation harms the poorest among us—including pensioners, Tennesseans on fixed incomes, wage-earners, savers, and more.
Jp Cortez, policy director for the Sound Money Defense League, explained in his testimony in support of HB 1874 that “the vast majority of states realize that taxing sound money harms in-state investors, in-state businesses, and even state revenues.”
“At a time of record-high inflation, Tennessee shouldn’t be punishing citizens with sales taxes for choosing to protect the purchasing power of their savings with sound money.”
Having eliminated sales taxes on the monetary metals, Tennessee will rise from 36th in the Sound Money Index to 9th place among the 50 states.
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The Sound Money Defense League is a non-partisan, national public policy group working to restore sound money at the state and federal level and publisher of the Sound Money Index.
Money Metals Exchange is a national precious metals investment company and news service with more than 500,000 readers and 350,000 customers. It also operates Money Metals Depository for vaulting of gold and silver, and Money Metals Capital Group, a collateral lending institution.