In Tennessee (US), precious metals are no longer subject to sales tax

The Governor of Tennessee signed a bill on May 29, 2022 to repeal the sales tax on precious metals. Previously, the bill was overwhelmingly supported by both houses of the state legislature. The decision is the result of years of efforts by community organizations, grassroots activists and coin dealers in Tennessee.

Investors can now purchase gold, silver, platinum and palladium ingots and coins without paying tax, which fluctuated in the range of 1-10% depending on the particular location of the buyer. Currently, 42 US states fully or partially exempt buyers of precious metals from sales tax. Similar bills have recently been considered in states such as Kentucky, Mississippi, Hawaii, Maine, Wisconsin and New Jersey amid rising inflation rates and the need for the public to protect money in hard assets.

Sales taxes on precious metals are waived for the following reasons:

  1. Such taxation discriminates against depositors and investors in precious metals. The purchase of shares, bonds, units of exchange-traded funds, currencies and other financial instruments is not taxable. However, gold and silver are also used as savings and investments!
  2. Gold and silver are for resale. Sales taxes are typically withheld from final consumer goods. Precious metals are not inherently used for consumption, so it is illogical to levy a tax on their sales.
  3. Withholding taxes is hurting the state's economy. The precious metals market is a competitive market, so dealers in states where taxes on precious metals sales are in force often move their business to neighboring states where there are no relevant taxes.
  4. Taxation of precious metals adversely affects ordinary citizens who are trying to protect their assets from the depreciation of paper money. Inflation is hurting the poorest, such as retirees, wage earners, savers and others. Most of these people buy precious metals in small quantities.