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Monday, April 15, 2024

Arkansas Passes Legal Tender Act, Removes Taxes on Gold and Silver

'The exchange of one type or form of legal tender for another type or form of legal tender shall not give rise to any tax liability...'

(Sound Money Defense League) Sound-money advocates are rejoicing as House Bill 1718, the Arkansas Legal Tender Act has become the law in the Natural State.

Backed by the Sound Money Defense League, Money Metals Exchange, and sound-money advocates and supporters throughout the state, HB 1718 reaffirms gold and silver as legal tender, as well as ends all taxes on purchase, sale or exchange of specie, including state capital-gains taxes.

The Arkansas Legal Tender Act, introduced by state Rep. Robin Lundstrum and state Sen. Jonathan Dismang, passed overwhelmingly out of the House by a vote of 82–8, passed unanimously out of the Senate with a 32-0 vote, and ultimately received Gov. Sarah Huckabee Sanders’s signature on April 11.

Specie is defined as “Coin having gold or silver content; or refined gold or silver bullion that is coined, stamped, or imprinted with its weight and purity; and valued primarily based on its metal content not its form.”

The measure continues, “Specie or legal tender shall not be characterized as personal property for taxation or regulatory purposes.”

To remove any doubt of the legislature’s intent, HB 1718 explicitly states, “the exchange of one type or form of legal tender for another type or form of legal tender shall not give rise to any tax liability,” and, “the purchase, sale, or exchange of any type or form of specie shall not give rise to any tax liability.”

This measure builds on momentum on sound money from previous Arkansas legislative sessions.

With strong support from the Sound Money Defense League and grassroots activists, Arkansas passed SB 336 in 2021, ending state sales taxes on purchases of gold and silver.

Now, with the passage of HB 1718, Arkansas becomes the 11th state also to end capital-gains taxes as applied to the sale of gold and silver (with some of those states simply having no income taxes in the first place).

Ending income/capital-gains taxes on precious metals sales is becoming more popular. Understandably so, considering that if taxpayers own gold or silver to protect themselves against the devaluation of America’s paper currency, thanks to the inflationary practices of the Federal Reserve, they frequently end up with a nominal “gain” when exchanging those metals back into dollars.

However, such gains are not necessarily real in terms of translating to an actual increase in purchasing power. This “gain” is often a nominal gain because of the slow but steady devaluation of the Federal Reserve note dollar. Yet, the government nevertheless assesses a tax.

Under HB 1718, the era of taxing gold and silver in Arkansas has come to an end.

In 2023, bills to restore sound, constitutional money have also been introduced in Alaska, Iowa, West Virginia, South Carolina, Missouri, Minnesota, Tennessee, Montana, Idaho, Wyoming, Kansas, and more. These measures would end taxes on the metals, reaffirm gold and silver as money, establish in-state depositories, enable state treasurers to invest state funds in the metals.

“States all over the country are waking up to the precarious condition of America’s money,” said Jp Cortez, policy director of the Sound Money Defense League. “Arkansas is helping lead the way in defending and restoring sound money, as well as removing the disincentives for citizens to protect themselves from the inflation and financial turmoil that flows from the Federal Reserve System.”

Currently Arkansas is ranked 30th out of 50 in the 2023 Sound Money Index. Passage of this measure will increase the state’s ranking dramatically.

The Sound Money Defense League is a non-partisan public policy group working nationally to restore sound money at the state and federal level and publisher of the Sound Money Index.

Recently named “Best Overall” gold and silver dealer in the United States by Investopedia, Money Metals Exchange serves almost 500,000 customers nationwide. A family-owned Idaho business founded in 2010, it also operates Money Metals Depository for vaulting of gold and silver and Money Metals Capital Group, a collateral lending institution.

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