(Sound Money Defense League) By signing legislation last night, Governor Mike DeWine has officially ended Ohio’s sales taxation of gold, silver, platinum, and palladium bullion and coins, enabling the Buckeye State to join Arkansas as the two states having canceled taxation of the monetary metals so far this year.
Backed by Reps. Kris Jordan and Riordan McClain, the Sound Money Defense League, Money Metals Exchange, Campaign for Liberty, grassroots activists, and coin dealer representatives, House Bill 110 (the 2022-2023 budget bill) restores the right of Ohio investors, savers, and small businesses to acquire precious metals without being slapped with sales and use taxes.
“These efforts are common sense,” said State Representative Jordan. “We should not be taxing money.”
“This form of double taxation discourages Ohioans from buying precious metals in the state and drives their business elsewhere. Ohio precious metal dealers [can now] better compete with our neighboring states as well as on the online marketplace. This exemption will also allow Ohio to attract coin shows, which generate significant amounts of economic activity,” Jordan explained.
The Ohio sales tax exemption goes into effect July 1, 2021.
In 2019, Ohio actually repealed the long-standing sales tax exemption for the purchase of precious metals investments. However, the state has now reversed course and reinstated the exemption after small businesses, coin conventions, income tax revenues, and investment activity began exiting the state.
Testifying before House and Senate Committees in Ohio during May hearings, Sound Money Defense League Policy Director Jp Cortez explained why 40 states had already removed some or all sales taxes from gold and silver. For example:
- 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, who will 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 physical precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals to preserve their wealth against the damaging effects of inflation. Inflation especially harms “the little guy” – including pensioners, retirees on fixed incomes, wage-earners, and savers.
Cortez hailed Ohio’s move to affirm sound money: “Ohio has ended the unfair practice of taxing citizens who are simply exchanging one form of money for another. The nine states that still tax the monetary metals are increasingly embarrassing themselves. The national tide has turned decisively against this foolish practice.”
Having eliminated sales taxes on the monetary metals, Ohio will rise from dead last in the Sound Money Index to 30th place among the 50 states.
Including Ohio, 41 U.S. states now fully or partially exempt gold and silver from state sales taxes. That leaves nine states – Vermont, New Jersey, Maine, Tennessee, Kentucky, Wisconsin, New Mexico, Mississippi, and Hawaii – and the District of Columbia as jurisdictions that still harshly penalize citizens acquiring the monetary metals to protect their savings against the serial devaluation of the Federal Reserve Note.
Of those remaining nine states, Hawaii, Maine, Mississippi, New Jersey, Tennessee, and Wisconsin have recently considered measures to remove the sales tax in their states…Original Source…
The Sound Money Defense League, 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.
