(Kitco News) – Gold and silver have taken another step forward to regain their former luster as monetary metals after Ohio became the 41st state to remove sales tax from bullion purchases.
On July 1, Governor Mike DeWine signed into legislation House Bill 110, which restores the right of Ohio investors, savers, and small businesses to acquire precious metals without being slapped with sales and use taxes.
The legislation was backed by State Representatives Kris Jordan and Riordan McClain.
These efforts are common sense. We should not be taxing money,” said Jordan in a statement.
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,” he added.
The newly minted law also received wide grassroots support from organizations including the National Coin and Bullion Association, the Sound Money Defense League, Money Metals Exchange and Ron Paul’s Campaign for Liberty.
Earlier this spring, in testimony before the State Senate and House as the legislation was being debated, Sound Money Defense League Policy Director Jp Cortez said that the bill levels the playing field between gold and other investment assets like equities and exchange-traded products. He noted that the state does not charge taxes on the purchase of stocks, bonds or other financial instruments.
Cortez added that the taxes penalized average consumers who want to use precious metals to protect their wealth.
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,” he said.
In a prepared statement, Cortez welcomed the updated law. However, he added that more work is still needed to be done as nine states continue to tax gold and silver bullion.
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,” he said.
Ohio is the second state this year to remove its sales tax from precious metals purchases. In May, Arkansas passed similar legislation, ending a three-year odyssey for some lawmakers.
The new law will take effect on Oct. 1, 2021.
The nine states that continue to tax gold and silver purchases include Vermont, New Jersey, Maine, Tennessee, Kentucky, Wisconsin, New Mexico, Mississippi and Hawaii; the District of Columbia also taxes physical gold and silver purchases.
However, Sound Money Defense League noted that of the nine holdout states, Hawaii, Maine, Mississippi, New Jersey, Tennessee, and Wisconsin have recently considered measures to remove the sales tax in their states.
A bill has been introduced to remove taxes at the Federal level. In March, U.S. Representative Alex Mooney (R-WV) introduced the Monetary Metals Tax Neutrality Act (H.R. 2284) bill in the House. According to the bill, the proposed legislation would remove capital gains, losses, or any other type of federal income calculation on gold and silver bars and coins.