(Money Metals News Service) With Governor Bill Lee’s signature on Friday, Tennessee has officially become the 42nd state in the U.S. to remove sales taxes from constitutional sound money (i.e., gold and silver).
Tennessee’s House Bill 1874 and Senate Bill 1857, introduced by Representative Bud Hulsey (R-2) and Senator Frank Niceley (R-8) passed both chambers of the Tennessee legislature overwhelmingly last month and took effect immediately upon the Governor’s signature at the start of Memorial Day weekend.
Substantial grassroots support tipped the balance. During the Senate floor vote, Senator Janice Bowling (R-16) commented, “I just want to thank the senator for bringing forward this bill along with half of the state of Tennessee that contacted all of us!”
The victory puts a capstone on long-running efforts by the Sound Money Defense League, Money Metals Exchange, Campaign for Liberty, and grassroots activists and coin dealers in Tennessee. Tennessee investors, savers, and small businesses can now acquire gold, silver, platinum, and palladium bullion and coins without being slapped with taxes as high as 10%, depending on the purchaser’s specific location.
Lead sponsor Hulsey said, “I’ve been working to free gold and silver from sales taxes in Tennessee since my kids were in elementary school. The Sound Money Defense League, in-state dealers, and folks all across Tennessee made their voices heard and helped get this bill across the finish line.”
Meanwhile, similar bills have recently been under consideration in Kentucky, Mississippi, Hawaii, Maine, Wisconsin, and New Jersey, as the nation’s inflation problem expands and as the national backlash against taxing constitutional money expands.
Including Tennessee, 42 U.S. states now fully or partially exempt gold and silver from the sales taxes. That leaves 8 just states and the District of Columbia as the primary jurisdictions that still harshly penalize citizens seeking to protect their savings against the serial devaluation of the Federal Reserve Note.
States have been removing sales taxes from monetary metals for the following reasons:
*** 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 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 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, Tennesseans on fixed incomes, wage-earners, savers, and more.
Jp Cortez, policy director for the Sound Money Defense League, noted in his testimony before the Tennessee House Finance, Ways, and Means Committee that “the vast majority of states realize that taxing sound money harms in-state investors, in-state businesses, and even state revenues.”
Cortez continued: “At a time of record high inflation, Tennessee shouldn’t be punishing citizens with sales taxes for choosing to protect the purchasing power of their savings with sound money.”
Having eliminated sales taxes on the monetary metals, Tennessee will rise from 36th in the Sound Money Index to 9th place among the 50 states.