Some States Over-Reaching Across State Lines to Tax Your Metals - New Jersey, New Mexico, and Ohio!
Last year a “dirty trick” legislation was passed by the U.S. Supreme Court making it legal for certain states to collect sales tax beyond their state lines.
Businesses are now forced to collect sales tax if a product is delivered to a state that participates in this latest round of coercive revenue-gathering.
The bad news is that GSI Exchange is put in a position where it will have to collect sales tax from customers residing in those states.
The sad thing is that GSI Exchange, like many other companies, doesn’t even need to have a physical presence in those states.
The good news is that most states don’t partake in this kind of thievery, exempting monetary precious metals from sales tax.
But for states that have decided to participate in this sound money tax, GSI Exchange is forced to handle the dirty work for what we consider a dirty trick legislation.
This is something that we don’t want to do, so we’ve found a few alternative solutions, all of which we’ll talk about in a moment.
If you live in Arkansas, California (the rule applies to precious metals purchases under $1,500), New Jersey, New Mexico, or Ohio, then, sorry to say...this new rule impacts you.
And now, the solutions.
First, looking at the devil in the details, that is, the specific language used in this legislation, you’ll notice that sales tax will be applied to deliveries of metals in taxable states.
In other words, sales tax is based not on your state of residence, but your state of delivery.
Hence, one legal option we offer customers is to have them place their precious metals in GSI Exchange’s depository in Wilmington, Delaware.
per For the small price of half a percent of your total bullion melt value, you get access to a COMEX approved vault in a state that exempts monetary metals from sales taxation.
Problem solved; sales tax averted.
Second, another solution lay in your hands. Instead of buying high premium metals, focus on high quality, yet highly undervalued monetary metals.
For instance, the coins people call “half dollars”--pre-1965 US coinage--are hitting attractive lows. Not surprisingly, dealers are currently buying them up at their highly-undervalued prices.
Liberty or Saint Gaudens gold coins, minted pre-1933, have also seen a large dip in premiums.
And another class of coins selling at an attractive discount are Peace Dollars.
Unlike some paper investments, gold and silver will never go to zero, so the lower the price plunge, the better.
And like most investments, once the selling dries up (remember, dealers are the ones buying now), it means that demand has set in--investors will begin buying what the dealers have already begun accumulating.
Following the basic law of supply and demand, prices will once again begin to ascend.
The main point here though is that there are alternatives to succumbing to such an unfair, coercive, yet “legalized” practice.
Being the sound money advocates that we are, taxation on “money” goes against the very principle of everything we stand for. Gold is money, and so is silver.
And in the best interest of our clients, we’ll do our best to provide services or advice to protect our investors from such unreasonable legislation.