NEW LAW: Alaska Considers Eliminating Local Taxes on Gold and Silver
At a Glance:
- Alaska has no state sales tax, but some local governments still tax gold and silver in the state.
- House Bill 3 would force local jurisdictions to exempt some gold and silver products from sales tax requirements.
- HB3 passed the Alaska House of Representatives and is now being debated by the state’s Senate.
NEW LAW: Alaska Considers Eliminating Local Taxes on Gold and Silver
Legislation in Alaska could eliminate local taxes on certain precious metal products. House Bill 3 was first introduced in January of 2023, where it was the subject of extensive debate before being passed by the Alaska House of Representatives on March 18th, 2024. The bill is headed to the Senate, where it is being cross-sponsored by Senator Bjorkman.
His motion to consider the law passed unanimously, which means Alaska state Senators will now debate a bill which could have profound implications for gold and silver stackers living within the state.
If it becomes law, House Bill 3 would prohibit cities and other localities from levying a sales tax on certain precious metal products. Specifically, the states aims to eliminate local sales taxes for gold and silver coins or bars that have been issued by the U.S. or foreign governments for use as legal tender.
Gold and silver investors should pay careful attention as the law proceeds through the Alaska Senate. Wisconsin passed a similar law earlier this month after intense pressure from gold investors and lobbyists.
What is House Bill 3?
If passed, House Bill 3 would fully eliminate Alaskan sales taxes for precious metals issued as legal tender. Alaska has no state sales tax, so gold dealers do not have to collect sales taxes for payment to the state government. Local jurisdictions, however, set their own rules and may collect local sales taxes on any items – including bullion products.
In other words, precious metals are taxed in some Alaskan localities – but not in others. In this respect, Alaska stands alone among the four other U.S. states with no state sales tax.
House Bill 3’s sponsors aim to correct this oversight by placing a major restriction on which products localities are allowed to tax. The bill amends AS 29.45.700, the section of Alaskan code that gives local jurisdictions (i.e. cities and boroughs) the authority to apply their own sales and use taxes to products purchased within their jurisdictions.
As of now, the bill isn’t quite as comprehensive in its bullion tax exemption as Wisconsin’s recently passed legislation. The proposed law states:
A city may not levy or collect a sales or use tax on the sale or exchange of specie.
In this case, the term “specie” refers to gold or silver products valued “primarily based on [their] metal content” that have been issued by a federal, foreign, or state government as legal tender. It is unclear whether the bill will undergo further revision in the Alaska Senate.
U.S. States Continue to Reform Bullion Sales Tax Laws
The passage of this bill would be a massive victory for bullion dealers and investors alike. While the state of Alaska levies no sales tax on precious metal products, citizens of the state in certain jurisdictions are still on the hook for pricey taxes on the gold and silver purchases in the status quo.
Alaska isn’t the only state reevaluating the way their tax laws apply to precious metals. Earlier this year, Yahoo News reported that four states were slated to consider easing tax requirements for precious metal purchases. Legislators in Kentucky and Wisconsin propose eliminating state sales taxes for certain bullion purchases, while lawmakers in Georgia and Kansas have proposed removing these investments from state income tax reporting requirements.
Wisconsin was the first state to finalize their reassessment of precious metal taxation. The state’s House Bill 29 eliminated state sales taxes for investments with a precious metal purity of 35% or more. As of now, only six states (and D.C.) offer no sales tax exemptions for precious metals.
What’s Next For House Bill 3?
Alaskan stackers should anticipate a lengthy debate cycle before HB 3 becomes the law of the land in America’s wildest state. It took over four months for the Alaska House of Representatives to pass the bill on a margin of Y25-N15.
Senators might also suggest and consider amendments to the text of the bill. Investors and dealers in the state should pay close attention to whether or not the Alaska Senate decides to expand the definition of tax exempt gold products provided by the House of Representatives in the original bill.
The bill’s passage would be more than just a legislative victory in Alaska. By all accounts, American states are scrambling to adjust their laws to encourage consumers to invest in intrinsically valuable, physical assets like gold and silver.
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About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.