NEW LAW: Wisconsin Eliminates Sales Taxes For Precious Metals

Friday, 22 March 2024 at 11:25 AM CST |

 

NEW LAW: Wisconsin Eliminates Sales Taxes For Precious Metals

Legislators in Wisconsin yesterday officially eliminated the state’s sales taxes on precious metal products.  Lobbying from bullion dealers and a groundswell of public advocacy helped secure bipartisan support for the law, which was first introduced in February 2023. Until this law, Wisconsin was surrounded by other states that had already eliminated sales tax requirements for precious metals. 

Senator Duey Stroebel co-authored the bill, remarking in January 2024 that his state is only one of seven that impose a sales tax on precious metals. He argued that gold and silver should be treated as a form of money – as is prescribed by the U.S. Constitution. Stroebel isn’t alone; governments and precious metal lobbyists alike view bullion as a fundamentally different type of investment than stocks, bonds, and other traditional investments. 

Stroebel published his comments during the bill’s January 2024 hearing:

Unlike stocks, bonds, real estate or other common stores of value, gold and silver are explicitly identified as money in the U.S. Constitution. Charging a sales tax on a form of money is fundamentally unfair, and has the effect of treating precious metal bullion as though it is merely a commodity. The concept of sound money dates back thousands of years, and individuals have long sought out precious metals as a stable store of value. 

Wisconsin legislators agreed, and the bill became law yesterday. Its ramifications for bullion stackers in Wisconsin are clear, and the state’s newest bill revitalizes the national movement to reclassify precious metals. 

Wisconsin: Bullion is Money, Not a Commodity

The move makes Wisconsin the 44th state to remove the sales tax requirement for bullion. Mississippi passed a similar law in April 2023. In the Northeast, a bill to exempt sales taxes for gold and silver passed unanimously but was vetoed just three months ago by governor Phil Murphey. New Jersey now remains one of the few holdouts as other states rush to follow suit and reimagine how their tax laws apply to gold, silver, and other precious metals. 

Today, Wisconsin Gov. Tony Evers signed a bill into law that repeals the state sales tax on gold and silver bullion.@mmaharrey10th https://t.co/XIFDDDnpPL

— TenthAmendmentCenter (@TenthAmendment) March 21, 2024

Precious metals have long been a fixture of American investment portfolios. The role of bullion in diversification is undeniable, and gold’s status as a safe haven asset makes it a favorite for investors who want to build intrinsic value into their investment portfolios. Wisconsin’s elimination of sales taxes for precious metals isn’t just a financial victory – it’s an ideological one. 

Proponents of precious metal reclassification cite Artl.S10.C1.3 of the United States Constitution:

No state shall […] make any thing but gold and silver coin a legal tender in payment of debts[.]

As Senator Stroebel points out, the text seems to suggest that precious metal coins should be treated as legal tender. While Wisconsin’s bill does not recognize bullion as legal tender, the law does go a long way to reform the way the alternative asset is treated by the state’s tax authority. 

Details: Wisconsin’s New Precious Metal Tax Law 

Investors can expect the law to go into effect as early as tomorrow, March 23. Wisconsin House Bill 29 defines “precious metals” as “coins, bars, rounds, or sheets that contain at least 35 percent gold, silver, copper, platinum, or palladium.” The low purity requirement is good news for investors who prefer durable .9167 gold coins, such as the 2024 American Gold Eagle. 

Aside from stackers, the biggest winner of Wisconsin’s latest law may be online gold dealers. Wisconsin citizens who buy gold, silver, and other metals online won’t have to pay sales taxes moving forward. The elimination of sales tax collection for precious metals lowers the total cost of investing in bullion, which can help investors buy more gold and silver.

The law does specify that bullion products exempt from sales taxation must be “marked with weight, purity, and content,” except for bullion products minted by a government. 

Precious metal investors in Georgia, Wisconsin, and Kansas look to their governments to follow suit. All three states either introduced or reintroduced laws meant to remove sales or income tax regulations for precious metals. Wisconsin’s newest law of the land could provide other legislators with the ammunition they need to breathe new life into their states’ precious metal markets.