Passed in 2007, US House Bill 1151 exempts precious metals, like silver and gold from being subject to taxation. Despite this, many states have taken the matter into their own hands by charging state sales taxes on precious metals and rare coin purchases. Among the states who charge sales taxes on precious metals purchases are Nebraska and Minnesota.
Most recently, South Dakota introduced discussion on a bill that would repeal the 2007 precious metals exemption. Passage was recommended by a study committee, but state legislators defeated the new proposal, largely because they were unable to agree upon the category into which precious metals coins and bullion should be placed. Collectibles are taxed, but commodities are not.
Support for the bill came from the Revenue Department, which estimated additional tax revenues of approximately $32,000 per year.
The bill’s detractors include sellers of precious metals coins and bullion, whose customers would merely purchase their investments from other states or online, where no additional fees are charged. Currently, a six percent tax on gold is greater than the margin made by many precious metals dealers.
