(Kitco News) - Several new bills filed in the Oklahoma and Missouri legislatures are seeking to eliminate state capital gains taxes on the sale of gold and silver, and also contain provisions to treat the precious metals as money rather than commodities, according to a recent article by Michael Maharrey for Schiff Gold.
Missouri State Rep. Doug Richey filed HB1867 on Dec. 11, and Rep. Bill Hardwick filed HB1955 in the Missouri legislature four days later. Both bills are companions to SB735, which was filed in the Missouri Senate by Sen. William Eigel earlier this month.
Meanwhile, in Oklahoma, State Sen. Shane Jett filed bill SB1507 and Sen. Nathan Dahm filed SB1508.
If any of these bills are enacted, they would legally eliminate state capital gains taxes on the sale and exchange of gold and silver bullion. Both Missouri and Oklahoma are already among the 42 that do not charge sales tax on the purchase of gold and silver bullion.
Taxes on gold and silver sales raise the cost associated with precious metals investment, and the added transaction costs are a barrier to using the metals as money. If the bills succeed in eliminating this tax on the exchange of gold and silver, Missouri and Oklahoma would effectively treat bullion as money instead of as a commodity.
The bills are a step toward reestablishing gold and silver as legal tender, as well as a challenge to the Federal Reserve’s monopoly on money in the United States.
“If you’re for less government, you want sound money,” said former U.S. Rep. Ron Paul in support of an Arizona bill to repeal capital gains taxes on gold and silver. “The people who want big government, they don’t want sound money. They want to deceive you and commit fraud. They want to print the money. They want a monopoly.”
According to the provisions of the Missouri bill, gold and silver, whether in physical or electronic form, would be accepted as legal tender and would be receivable in payment of all debts contracted for in the state. Missouri would also be required to accept gold and silver for the payment of public debts, while private debts could be settled in gold and silver if both parties chose to do so.
Practically speaking, this bill would put gold and silver on equal footing with U.S. dollars in Missouri. The state of Oklahoma already enacted a similar law in 2014, and Utah and Arkansas also treat gold and silver as legal tender.
The proposed Missouri law would also increase the supply of gold and silver in the state’s coffers as it authorizes the state to invest in gold or silver “greater than or equal to one percent of all state funds.” The law expressly prohibits any state agency, department, or political subdivision from seizing gold or silver bullion.
Lobo Tiggre, editor of The Independent Speculator, commented on the proposed legislation and the broader move to reestablish gold and silver as legal money in a post on X. “It's just two states trying to make #gold and #silver legal tender, but it's still a significant sign of the times,” Tiggre wrote. “And if memory serves, Utah and other states have made similar efforts in the past...”
In another post, he pointed out one of the major challenges facing the moves.
There's a big problem with well-intentioned efforts to get #gold and #silver back into circulation: in an inflationary environment, people don't want to spend their real money, they want to hold on to it and get rid of the fiat garbage...https://t.co/xavdwOLsIo
— Lobo Tiggre (@duediligenceguy) December 26, 2023
According to the Sound Money Defense League, only seven U.S. states still levy sales taxes on gold and silver: New Mexico, Hawaii, Wisconsin, Kentucky, Maine, New Jersey, and Vermont, after Mississippi became the 43rd state to eliminate state taxes on the precious metals earlier this year. Of these seven remaining states, five considered legislation in 2023 to end the tax.
The Federal capital gains tax rate of 28% on gold and silver sales is not impacted by state-level legislation, and it remains a major barrier to precious metals’ ability to compete with the U.S. dollar as a payment instrument. 39 U.S. states still tax capital gains on the sale of gold and silver.
