Arkansas removes sales tax from gold and silver, more U.S. states to follow?
(Kitco News) - The precious metals have advanced another step in their journey to reclaim their historical status as a recognized currency in the U.S.
It has been a long journey for the many proponents of the legislation. It was first introduced in 2018 but failed to make enough progress through the state's legislative bodies. Senate Bill 336 was re-introduced at the start of the year by Sen. Mark Johnson and Rep. Delia Haak. The legislation saw broad-based support, passing the Senate by a vote of 30-1 and then being passed in the state House unanimously by 93-0.
"[There were] lots of behind-the-scenes discussions," said Senator Johnson, in a statement. "Let us just say that the commonsense arguments made were finally heard."
"[This bill's passage is a] huge step forward to building economic opportunity in Arkansas," said Representative Haak.
The new law will take effect on Oct. 1, 2021.
The law was also supported by grassroots activists and coin dealers across the state, including the National Coin and Bullion Association and by Sound Money Defense League, a national public policy group that works to promote gold and silver as recognized currency in the U.S.
In a press release, Jp Cortez, policy director for the Sound Money Defense League, said that Arkansas legislation creates a clear path for other state legislators in New Jersey, Maine, Ohio, and Tennessee currently debating similar bills.
"Including Arkansas, 40 U.S. states now fully or partially exempt gold and silver from the sales taxes. That leaves ten states and the District of Columbia as the primary jurisdictions that still harshly penalize citizens seeking to protect their savings against the serial devaluation of the Federal Reserve Note," said Cortez.
Along with recognizing precious metals as a form of currency, Cortez said that the new law also levels the playing field for investors looking to preserve their wealth.
"Gold and silver are held as forms of savings and investment. States do not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments, so it makes no sense to tax monetary metals," Cortez said in a statement.
"Purchasers of precious metals aren't fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals as a way to preserve their wealth against the damages of inflation. Inflation harms the poorest among us—including pensioners, Arkansans on fixed incomes, wage-earners, savers, and more," he added.
It's not only states that are looking to remove sales tax from precious metals purchases. A bill has been introduced to remove taxes at Federal level.
In March, U.S. Representative Alex Mooney (R-WV) introduced the Monetary Metals Tax Neutrality Act (H.R. 2284) bill in the House. According to the bill, the proposed legislation would remove capital gains, losses, or any other type of federal income calculation on gold and silver bars and coins.