Introduced by Representative Joel Bomgar (R-58), House Bill 37 removes sales and use tax against gold, silver, platinum, and palladium bullion and currency in Mississippi.
Under current law, Mississippi citizens are discouraged from insuring their savings against the devaluation of the dollar because they are penalized with taxation for doing so. Passage of this measure would remove disincentives to holding gold and silver for this purpose. HB 37 is important for a few reasons:
- Levying sales taxes on precious metals is inappropriate. Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is "consuming" the good. Precious metals are inherently held for resale, not "consumption," making the application of sales taxes on precious metals inappropriate.
- Studies have shown that taxing precious metals is an inefficient form of revenue collection. The results of one study involving Michigan show that any sales tax proceeds a state collects on precious metals are likely surpassed by the state revenue lost from conventions, businesses, and economic activity that are driven out of the state.
The harm is exacerbated when you consider that many of Mississippi’s neighbors (Alabama and Louisiana) have already stopped taxing gold and silver. Arkansas and Tennessee are considering their own sales tax exemptions for precious metals this year.
- Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers will take their business to neighboring states, such as Alabama or Louisiana (which have eliminated or reduced sales tax on precious metals), thereby undermining Mississippi jobs. Levying sales tax on precious metals harms in-state businesses who will lose business to out-of-state precious metals dealers. Investors can easily avoid paying $110.60 in sales taxes, for example, on a $1,580 purchase of a one-ounce gold bar.
In total, 39 states have reduced or eliminated sales tax on the monetary metals.
- Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. Mississippi does not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments.
- Taxing precious metals is harmful to citizens attempting to protect their assets. Purchasers of precious metals aren't fatcat 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, Mississippians on fixed incomes, wage earners, savers, and more.
This measure is one of many sound money bills being introduced across the country this year. Recently having removed all taxes on gold and silver, Wyoming plans to consider a measure to empower the state treasurer to hold physical gold and silver in state coffers. Several bills to remove taxation on sound, constitutional money are also being, or have been, introduced in Tennessee, Hawaii, South Carolina, Idaho, and Alabama.
Backed by the Sound Money Defense League, these measures protect Mississippi citizens by removing barriers to insulating their wealth with the only money proven to protect against the Federal Reserve Note’s ongoing devaluation.