Is There Sales Tax on Gold and Silver in California?
Taxing precious metals punishes savvy savers who utilize them as diversifying investments, rather than rewarding them for doing so.
Sound money advocates have successfully passed sales tax exemption bills in multiple states, helping millions of Americans take charge of their savings and wealth preservation.
California’s use tax is charged on tangible personal property that crosses into California while in transit from its seller to buyer, usually items subject to sales tax elsewhere.
This tax acts as an indirect sales tax and is calculated using the state base percentage rate plus any city, county or district taxes. To be certain of what’s currently applicable in terms of state, city and county tax rules as they could change regularly.
Purchases of physical gold and silver have long been used to diversify one’s savings portfolio against risks associated with paper investments like stocks, bonds, and mutual funds. When states impose sales taxes on precious metals such as gold and silver, however, these actions can penalize citizens who employ sound long-term investment strategies – however some states like Utah and Oklahoma are taking an unconventional tack by declaring gold and silver money instead.
Last year was an exceptional one for sound money advocates fighting discriminatory taxes on precious metals, and an alliance of sound money activists is now working hard to take it even further.
Precious metals provide an effective hedge against inflation, but can become prohibitively expensive when fees, commissions and sales tax are added into the equation. This additional expense dissuades many people from holding or using precious metals as savings vehicles.
California already exempts gold bullion and rare coins costing more than $1,500 from taxes; however, this exemption can be altered by the Board of Equalization.
As such, state legislators need to closely examine their policies regarding precious metals to avoid punishing people who own reserves in them. As states don’t levy sales taxes on stocks or ETFs, it doesn’t make sense for precious metals to incur sales taxes either; hence sound money allies’ push for sales tax exemptions in Alabama and Virginia this year.
Like with any investment, gold and silver investment regulations must be understood before purchasing either. States establish the overall tax rate while individual cities and counties may add their own local levies – these levies may differ significantly between regions so be sure to research rates before committing.
Additionally, certain states mandate the collection of use taxes on items sold in bulk or as part of a single sales transaction of greater than $1,500. These are calculated at checkout using tax rates established by your delivery location in California.
Investment in precious metals has long been used as a hedge against economic instability and inflation, yet often comes subject to sales and capital gains taxes that diminish returns. Many states are considering legislation to remove these punitive tax policies and increase overall returns.
Precious metals have long been seen as reliable economic protectionism. Unfortunately, buying bullion can be prohibitively expensive once fees, commissions and sales tax are taken into account. A gold-backed IRA may be the ideal way to sidestep additional charges associated with traditional market trading.
While many states continue to levy sales tax on investment-grade precious metals, some are beginning to see the injustice in punishing investors who purchase precious metals to hedge against America’s devaluation of paper money. Government bureaucrats punish owners by counting gains made when exchanging metal for Federal Reserve Notes as income.
Most purchasers of precious metals aren’t mega investors; rather they’re everyday people saving in small increments to protect themselves from inflation. States such as California must cease imposing sales taxes on these protective measures; other states are taking notice and have already removed such levies on bullion sales taxes altogether.