Precious Metals Sales Tax

Sales tax on bullion is a state decision

The United States has no national VAT or GST. Sales tax is set by states and local governments, so the same 1 oz coin can be tax-free in one state and taxable across the border. Rules fall into three broad groups:

• Full exemption. Texas is a clear example: Texas Tax Code § 151.336 exempts the sale of gold, silver or numismatic coins and of platinum, gold or silver bullion from state and local sales tax.
• Exemption above a threshold. California exempts sales "in bulk" of monetized bullion, nonmonetized gold or silver bullion and numismatic coins when a single transaction reaches a dollar threshold set under CDTFA Regulation 1599. The threshold is adjusted for inflation, so check the current figure with the CDTFA before a large order.
• No exemption or a partial one. Some states tax bullion like other goods, or exempt only certain metals or coins.

Rules change through state legislation, so treat any list you find online as a starting point and confirm with your state department of revenue. Our state pages, for example bullion dealers in Texas, coin shops in California or gold dealers in New York, list local shops so you can compare them with online offers.

Buying online from another state

Since the Supreme Court decision in South Dakota v. Wayfair (2018), states may require out-of-state sellers to collect their sales tax. In practice the tax on an online order follows the rules of the state where the metal is delivered, not where the dealer is based.

Federal tax when you sell: the collectibles rule

The IRS treats precious metals as collectibles. Under 26 U.S.C. § 408(m) a collectible includes "any metal or gem" and "any stamp or coin", and § 1(h) taxes long-term collectibles gain at a maximum rate of 28%. IRS Topic 409 states that net capital gains from selling collectibles such as coins are taxed at a maximum 28% rate, and that an asset generally counts as long-term after more than one year.

Example with fixed numbers: you buy one 1 oz Gold Buffalo for $2,000 including premium and sell it two years later for $2,600. The $600 gain is long-term collectibles gain, taxed at your ordinary rate but not above 28%. If you had sold within one year, it would be short-term gain taxed as ordinary income. Keep your invoices: the price you paid, including the premium, is your cost basis.

Gold in an IRA

A self-directed IRA cannot normally hold collectibles. Section 408(m)(3) makes exceptions for American Eagle gold, silver and platinum coins, coins issued under state law, and bullion whose fineness meets the minimum required for delivery on a regulated futures market, held by a trustee. In practice that means .995 gold and .999 silver; see fineness for details. Home storage of IRA metal does not meet the trustee requirement.

Before you buy, compare the delivered price of the cheapest gold coins and add your state sales tax, if any, to get the real cost.