Bullion And Coin Tax Exemption – Act Now! | Member-Written NOW Articles

(Editor’s Note: Normally, I don’t like to touch on politics, as too much of that can corrupt and rot a hobby so much one can find themselves in a situation similar to Star Wars fans, but the below piece makes sense. It is not so much enabling the partisan rancor that scares me as it is calling for all of us coin fans to act nicely.)

Some exciting things are developing in Wisconsin right now related to bullion and coins. Legislation has been introduced which would create a sale and use tax exemption for precious metal bullion. The bill defines this as coins, bars, rounds, or palladium, and importantly, this would also not differentiate between what we would refer to as bullion or bullion coins vs. collectible or graded coinage. This would include copper and copper-nickel-clad coins too since they contain at least 35 percent copper and two bills are working through the Legislature right now.

This is common practice for each chamber of the body. Senate Bill 33 received a public hearing in January and last month's passage was recommended by a committee on a 5-3 vote and it is now available for scheduling with the full Senate. In the other chamber, Assembly Bill 29 is further along. A public hearing and committee vote took place in February and the Joint Survey Committee on Tax Exemptions found these provisions in the bill are good public policy on a vote of 8-1. A final version of the bill passed Feb. 20 and with it now being transmitted to the Senate and available for scheduling, this is why action is needed right now.

The Wisconsin State Senate has only two scheduled floor periods remaining for this session. The first is on March 12-14 and the second is on April 11. Please contact your Wisconsin State Senator and Wisconsin Senate Leaders and urge them to support Assembly Bill 29/Senate Bill 33. You can look up who your Wisconsin Legislators are by going to the following website, entering your home address in the search bar in the upper-right corner, and then clicking on each legislator for how to contact them: https://maps.legis.wisconsin.gov/. You can also find the Senate leaders and their contact information on this website: https://legis.wisconsin.gov/senate. Please CONTACT YOUR STATE SENATOR TODAY and ask them to support enacting ASSEMBLY BILL 29 INTO LAW!!!

I have also included some of the talking points I have shared with my Legislators. Please feel free to take these and reuse them or make them your own as you are calling, emailing, talking directly to, or writing to your Wisconsin State Senator.

COMPETITIVENESS

Without exemptions in Wisconsin, it is very difficult for Wisconsin coin and bullion dealers to compete with those from out of state. As a Wisconsin resident, I want to do business with companies located in my community. More than 40 other states have exemptions on coins, currency, and bullion and this includes Michigan, Illinois, Iowa, and Minnesota. Kentucky has a similar bill awaiting action in the state’s current Legislature session that seeks to do the same thing.

ECONOMIC DEVELOPMENT

Coin dealers in Wisconsin pay business, local, payroll, and property taxes. They purchase equipment, supplies, and services and all of these contribute to our state and local economies. They are members of local churches, business and charitable organizations alongside their customers. Also, most coin dealers are family businesses and all would benefit dramatically from the elimination of the sales tax on currency and bullion which would allow them to compete fairly with surrounding states and the vast majority of other states that have this tax break. With this break, dealer sales will increase, they will create more jobs as a result, and will add to their payrolls and generate higher tax revenues elsewhere, too.

Large coin shows like the American Numismatic Association Convention attract upwards of 8,000 to 10,000 attendees from around the world. The association and its show-running peers will not consider Wisconsin for their conventions if dealers attending must charge sales taxes. Thousands of people and their families attend these shows which last three to five days and generate major side sales.

INVESTMENTS AND FAIRNESS

Coins and bullion are legal tender and not consumer goods used in everyday life. They are not consumed, do not wear out, and are not replaced. These products are purchased for ultimate resale and not for any kind of conventional personal use. Precious metal products are qualified IRA Investments, per the 1997 Taxpayer Relief Act and the 1986 legislation that created the U.S. Mint’s American Eagle bullion coins (Internal Revenue Code Section 408(m)). No other IRA-eligible investment products are subject to sales or use tax. Such a tax on these investment purchases is an immediate investment “penalty.” Precious metals must increase even more in value to be profitable for the purchaser. Serious investors will not pay sales tax only to suffer this investment penalty.

Collecting sales tax on these investment items results in double taxation. Coins and bullion are subject to capital gains tax when sold. If a sales tax is imposed, the purchaser pays on the front end and the back end of the transaction. The nation’s largest coin dealer, the United States Mint, does not charge its customers sales tax on purchases, even for those customers who reside in the handful of states that still impose sales tax on the sales of currency and bullion. However, the only way to purchase American Eagle gold and silver bullion is to purchase from a dealer. Sales tax on these investment purchases discourages Wisconsin residents from purchasing in the state of Wisconsin and advantages outsiders.

Wealthy investors can purchase many of these products in the form of commodity or options contracts, shares in precious metals exchange-traded funds, or certificates of bullion stored in the vaults of the Royal Canadian Mint in Canada, the Royal Mint in England, or the Perth Mint in Australia. Closer to home, purchases stored in Delaware’s precious metals vaults are, of course, not subject to Wisconsin sales and use taxes. Small investors—who can least afford it—bear the burden of sales taxes for their more modest investment transactions. A sales tax in Wisconsin on these products unfairly penalizes smaller investors.

Because of the effects of inflation, the price of gold in the 21st century has outperformed every major US stock index, and silver has outperformed almost all of them. Many coin price increases have also exceeded the appreciation in US stocks. Wisconsin investors should not be penalized by paying a sales tax if they want to consider these investment options for themselves and their families.

Thank you for taking time to consider this request to SUPPORT this CHANGE.

Can we not pay less for these? P.C.G.S.

Have an interesting numismatic topic you’d like to share with your fellow NOW members?

Send your article to evan.pretzer@protonmail.com today!!!

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