Sales Tax on Gold and Silver in California
Gold and silver investments are considered by many investors to be assets, which may increase in value over time. When sold, any profits are subject to capital gains taxation.
Where you live determines how much taxes you owe. New Jersey, with support from Sound Money Defense League and Money Metals Exchange, recently passed legislation which exempted precious metal sales tax sales taxation altogether.
Exemptions
Physical gold and silver have long been prized as tangible stores of wealth and an insurance against inflation, currency fluctuations, and economic uncertainty. But any profits realized from precious metal investments may be reduced by tax liabilities.
Most states exempt bullion investments from sales tax; however, certain cities and counties may impose an additional rate; it’s therefore wise to consult both your state and city’s tax rules prior to making a purchase decision.
More states are passing sound money laws with exemptions for precious metal investments or transactions above certain thresholds, providing sound money advocates a victory while simultaneously lowering overall costs associated with purchasing physical gold and silver. New Jersey recently joined 44 other sound money states when its Senate Bill 721 became official; this represents a huge victory for freedom.
Taxes
California boasts one of the world’s largest economies. Californian industries span finance, insurance, real estate, professional and business services manufacturing government enterprise education healthcare and retail trade – an array of economic sectors all within one state!
Many states provide exemptions to the basic sales tax for purchases of precious metals; these vary from state to state.
Financially prudent individuals often save gold and silver as an investment vehicle or reserve fund in case of emergencies; unfortunately, these savings and investments are subject to income taxes.
Legislators in several states have recognized the injustice of imposing income taxes on such small gains as bullion purchases. Utah and Oklahoma recently took steps to make their states gold- and silver-friendly by reaffirming private citizens’ constitutional right to hold and use precious metals as money, while New Jersey has abolished this regressive tax altogether.
Dealers
California, as one of the nation’s most populous states, boasts an array of gold bullion and coin dealers. Offering US Gold Eagle series coins as well as PAMP and Credit Suisse bullion bars; Chinese panda and lunar bullion coins from China; as well as rare precious metals for collection – there is plenty of choice available in California when purchasing precious metals and coins.
Many purchasers of precious metals don’t purchase them as part of an investment strategy, but rather to protect against inflation and market instability. Taxing these non-correlated assets punishes citizens who follow an established savings plan in favor of riskier paper investments.
Future States Hoping to Follow Utah and Oklahoma Lead. By recognising physical gold and silver as money, states could follow in Utah and Oklahoma’s footsteps, freeing these precious metals from sales taxes – making purchasing easier for those in need while offering valuable incentive to continue buying.
Shipping
When purchasing precious metals and shipping them outside of California, sales tax won’t apply since California doesn’t extend sales tax laws to out-of-state dealers; however, this doesn’t apply when stored by an international firm like Loomis.
When it comes time to sell physical gold and silver investments, capital gains taxes could apply. These taxes are calculated based on the difference between selling price and purchase price and usually apply at rates up to 28%.
Though these taxes might appear as an efficient means to raise state revenue, they actually exacerbate economic woes by discouraging precious metal investments and making it hard for companies to compete against those without these burdens. Therefore, more states are eliminating them altogether.
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