As of August 1, 2024, 44 U.S. states have enacted full or partial sales and use tax exemptions on the retail sales of precious metals bullion, coins, and currency. This includes states that either have no state sales taxes or have specific exemptions for precious metals. Kentucky and Mississippi are among the most recent states to implement such exemptions, with Kentucky’s exemption taking effect today.
While it may seem against any state’s best interest to collect less in revenues from businesses selling bullion, studies show that the sales tax revenues from other sources are increased by these kinds of exemptions. Because some states do not charge sales tax, buyers from other states will purchase bullion or collectible coins in those states rather than pay taxes in their own state. This is terrible for local coin dealers in states that border states with exemptions. The competitive disadvantage for them translates into fewer sales, fewer employees, and less money in payroll and income taxes collected.
States with no sales or use tax on coin and bullion are also able to attract national coin shows conventions. These conventions bring with them increased tax revenue in the form of spending on hotels, restaurants, gas, and transportation. People who come for coin shows and coin conventions visit other tourist attractions and businesses as well, and increased sales tax revenues result. In fact, many coin dealers also sell antiques and other collectibles that are not exempt from sales tax, so the state benefits in that way as well.
States with Sales Tax Exemptions
What is exempt from tax? In many states not all numismatic pieces. In some states the exempt pieces include “[P]recious metal bullion and coins that are or were at one time used as currency or medium of exchange in the United States or a foreign country,” but not tokens, paper money, or wampum. Grand Rapids Coins is fortunate to be located in Michigan which has had use and sales tax exemptions in place for many years.
A list of states with partial or full exemptions includes: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, and Washington.
If your state is not on this list, and you’re seeking to include coins or bullion as a part of your overall investment strategy for retirement or wealth building, give Grand Rapids Coins a call. We would love to be your sales-tax-free coin dealer.
