Precious metal owners and investors can count on further tax exemptions and fewer regulations after Gov. Kay Ivey signed a new bill into law to remove restrictions on gold and precious metals.
Senate Bill 13 (SB13) was sponsored by State Sen. Tim Melson (R-Florence) and received unanimous support in the House and the Senate. The bill was signed into law by Ivey on Thursday.
In 2019, Alabama removed sales tax and other restrictions on buying gold, silver, platinum and palladium. The original legislation applied specifically to coins and bars.
SB13 broadens the tax exemptions to include the most common forms of metal bullion. The requirements state that the bullion, bars or coins must be at least 80% of the precious metal being purchased.
The law also removes extensive reporting requirements not addressed in the previous legislation. Previously, those who sought a tax exemption for purchasing precious metals had to file a report to the Alabama Department of Revenue. With this new law, those restrictions will be removed.
According to Stefan Gleason, President of the Money Metals Exchange (MME), gold and other precious metals have seen the highest demand in 23 years.
“Rampant global inflation, the war in Ukraine, stock market volatility and central bank missteps have fueled retail interest,” Gleason said.
Gleason marked the nearly three-quarter increase in the purchase of specific state-backed gold coinage.
“Even as the government-run institution continues to be plagued by its ongoing mismanagement, it sold 155,500 ounces of various denominations of the American Eagle gold coin in March alone, up 73% from the prior month,” Gleason said.
The coins referenced are produced and secured by the federal government and can come in silver, gold, platinum and palladium, all mined in the United States.
“Many states surrounding Alabama [such as Georgia and Florida] have cultivated pro-sound money environments, eliminating sales taxes on gold and silver,” Gleason said. "Alabama savers and investors are thankful that the legislature expanded and extended the state’s exemption.”
The recent success of precious metals is due to many seeing the commodity as security against inflation and more unstable fiat currencies. Current events on the worldwide stage have caused inflation to skyrocket in the past year.
According to the Sound Money Defense League (SMDL), many states are deciding to remove the taxes on precious metals because precious metals are a form of investment and savings.
They also claim that taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. States do not tax the purchase of stocks, bonds, currencies and other investments. Therefore, the SMDL believes it makes no sense to tax monetary metals.
The SMDL also believes that taxing gold and silver harms state economies. Buyers and traders in states with precious-metals sales taxes often take their business to neighboring states that have eliminated or reduced sales tax on precious metals. This interstate trading, in turn, removes potential income and economic dispersion from states that have restrictive laws.
To connect with the author of this story, or to comment, email craig.monger@1819news.com.
