On the heels of a credit outlook downgrade for New York City, Mayor Zohran Mamdani and the state legislature have just declared war on the financial center’s vibrant gold bullion market.
Global credit ratings agency Moody’s dropped the Big Apple’s outlook from “stable” to “negative,” releasing a statement:
The outlook change to negative reflects New York City’s updated spending projections, which give rise to larger multi-year budget gaps than previously forecast. That the city projects large and persistent imbalances under still-favorable economic and revenue conditions highlights the extent of its underlying structural budget challenges.
Mayor Mamdani called the outlook adjustment “premature” and cited $5 billion in additional funding through legislation under consideration in the chambers of the New York State legislature as a “real commitment to ensuring that we can bridge this inherited fiscal deficit...”
Among revenue-collection ideas proposed by Mamdani’s office is a new tax on investment-grade gold and silver bars—and coins and rounds as well. Since 1989, all purchases of precious metals above $1,000 have been exempt from state sales tax. This exemption does not apply to numismatic items whose value is dependent on rarity or collectability or used for artistic purposes.
The erstwhile financial capital of the world is home to Wall Street and the CME Group which operates the precious metals futures market known as the Comex. It’s also home to dozens, if not hundreds, of precious metals dealers, depositories, and institutional gold clearinghouses. But the good mayor plans to slap big taxes on the world’s greatest financial asset to stem the bleeding of his enormous budgetary shortfall.
Complicating the situation is the reality that the CME Group has resisted calls to expand the network of precious metals depositories involved in deliveries on futures contracts beyond the New York region—a long-standing practice that dates to a bygone era when New York was the center of the financial universe. In fact, two congressmen recently filed a federal bill on this.
According to documents from the New York City Mayor’s Office and the New York State Legislature, officials project an increase of $300 million in tax revenue for New York City and $601 million statewide from the elimination of the longstanding precious metals exemption in current law.
Mamdani may be greedily eyeing hundreds of millions of dollars in revenues from taxes on gold and silver, but these estimates fail to account for the financial devastation that the entire industry would face. With this new tax, dealers would close their doors, institutions would leave New York, and the tax base shrinks rather than grows.
Conversely, when states remove sales taxes on gold and silver, there are new jobs and revenues created.
The Sound Money Defense League—the nation’s leading public policy group on gold and silver issues at the state and federal level—has been tracking this issue since 2014. The overwhelming trend is to remove taxes on the only form of money mentioned in the US Constitution, not impose them.
New York has considered measures like this in previous years, failing to enact the new tax despite several attempts. The reasons are obvious: investors will simply shift to purchasing metals in one of the many states that do not impose this tax or online dealers.
This reality is exacerbated by the fact that Pennsylvania, New Jersey, Connecticut, Massachusetts, and Rhode Island (virtually all of New York’s bordering states) have already partially or fully eliminated sales taxes on purchases of gold and silver.
Notably, New Jersey passed its exemption on precious metals in 2024 without a single dissenting vote across both chambers of the state legislature. And Connecticut expanded its exemption in 2025.
Currently, 44 states in the country do not charge a state sales tax on purchases of gold and silver. Of the six states that still charge this tax, four are currently considering legislation to end it.
The new attention on taxing gold and silver is financial desperation disguised as financial prudence. Mayor Mamdani and other advocates of this proposal intend to use precious metals investors as a bailout for an increasingly fiscally-tenuous government bureaucracy.
New York will not tax you for purchasing stocks, bonds, real estate, ETFs, cryptos, and myriad other investments. However, if a New York resident buys precious metals as a means of saving their wealth against inflation, Mayor Mamdani and lawmakers in Albany want their pound of flesh.
New York should preserve the existing tax exemption on purchases of precious metals rather than throw the New York gold market into crisis.
Jp Cortez is the Executive Director for the Sound Money Defense League, a non-partisan, national public policy group working to restore sound money at the state and federal level, and lead author of the Sound Money Index.
