7710 / Are state or local sales taxes imposed on the purchase of precious metals?

State or local sales tax may be imposed on a purchase of precious metals, regardless of whether the form taken is pure bullion, bullion coins or numismatic coins. According to the Industry Council for Tangible Assets, Inc. (ICTA), some 27 states allow sales tax exemptions on precious metals and rare coins, but may have established minimum purchases to obtain the exemption.¹ For example, California currently exempts only precious metals purchases in bullion and coin from California sales tax if the purchase is for more than $1,500 in-state (but does not currently cover the purchase of platinum bars), and also exempts all purchases of any size if the purchase is made from and delivered out-of-state (including platinum).²

Some states impose sales taxes on almost every type of transaction whether coins, paper, money, or bullion. These sales taxes can be substantial and can be a substantial impediment to investment in metals for investment purposes because they raise the break-even point. However, more states appear to be moving toward exempting the purchase of precious metals from sales taxes with Louisiana and Arizona specifically exempted certain precious metals in 2017.³ State sales tax rules on precious metal vary greatly by state both as to coverage or exemption. For example, Montana and Wyoming do not tax precious metals at the state level but allow for sales taxation at the local level (i.e., municipalities). Certain other states exempt large purchases (commonly purchases in excess of about $1,000 or $500) or exempt some precious metals (or currency) purchases, and not others, without any explanation for the differences. So, it is necessary and useful to ascertain whether a type of precious metal or specific transaction will be subject to a specific state’s sales tax at the time of any purchase. Where state sales tax exemptions exist, it has been observed that the newest precious metal, palladium, and even platinum, are frequently not yet on the list of precious metals exempt from state sales tax.

1. See www.JMBullion.com/investing-guide/taxes-reporting-iras/sales-tax-precious-metals/ for an updated list of states exempting sales taxation on at least certain precious metals. The two lists did not match because taxation or exemption is a moving target with the clear trend toward exemption of some precious metals or certain transactions involving precious metals.

2. Cal. Rev. & Tax. Code § 6355(b).