(Money Metals New Service) Representatives in the Ahola State have reintroduced legislation to end the sales tax on purchases of gold and silver.
Introduced by Representatives Diamond Garcia, David Alcos, Lauren Matsumoto, Elijah Pierick, and Gene Ward, House Bill 1724 removes general excise tax on purchases of gold and silver coins and bullion in Hawaii. This measure was considered in 2021, and passed out of multiple House committees before running into a deadline at the end of the session.
Under current law, Hawaii citizens are discouraged from insuring their savings against the devaluation of the dollar because they are penalized with taxation for doing so. Passage of this measure would remove disincentives to holding gold and silver for this purpose. HB 1724 is important for a few reasons:
- Levying taxes on precious metals is inappropriate. Precious metals are inherently held for resale, making the application of taxes on the purchase of precious metals inappropriate.
- Studies have shown that taxing precious metals is an inefficient form of revenue collection. The results of one study involving Michigan show that any tax proceeds a state collects on precious metals are likely surpassed by the state revenue lost from conventions, businesses, and economic activity that are driven out of the state.
- Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers will take their business online, thereby undermining Hawaii jobs. Levying taxes on precious metals harms in-state businesses.
In total, 43 states have reduced or eliminated taxes on the purchase of monetary metals.
- Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. Hawaii does not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments.
- 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, Hawaiians on fixed incomes, wage earners, savers, and more.
The national backlash against inflation caused by federal spending, debt, and money printing is growing. State legislators this year have already introduced an unprecedented number of bills to remove government impediments to buying, saving, and using gold and silver.
The Aloha State is currently ranked tied for 45th in the 2024 Sound Money Index. By passing HB 1724, Hawaii can vastly improve its Sound Money Index ranking, as well as become the 44th state to end sales taxes on precious metals.
More than a dozen states have introduced pro-sound money legislation in 2024 so far, including Alaska, Indiana, Iowa, Georgia, Kansas, Kentucky, Missouri, New Hampshire, New Jersey, Oklahoma, Vermont, West Virginia, and Wisconsin.