Alabama to exempt bullion from sales & use tax, June 2018
When Governor Kay Ivey signed Senate Bill 156 on March 6, Alabama became the 37th state to exempt bullion from sales and use tax.
Sales of gold, silver, platinum, and palladium bullion are currently subject to sales and use tax in Alabama, as is money. SB 156 creates a temporary exemption for the sale and use of these products. It takes effect June 1, 2018, and will last five years unless extended.
The exemption applies to gold, silver, platinum, palladium, or a combination thereof “that has gone through a refining process and for which the item’s value depends on its mass and purity, and not on its form, numismatic value, or other value.”
Exempt bullion includes bars, coins, and ingots. It “may contain other metals or substances, provided that the other substances are minimal in value compared with the value of the gold, silver, platinum, or palladium and the other substances do not add value to the item.”
To qualify for the exemption, these items must be refined and contain at least 90 percent gold, silver, platinum, palladium, or some combination thereof. In addition, the sales price must fluctuate with and depend on the market price of the underlying precious metal, “not on the item’s rarity, condition, age, or other external factor.” Jewelry and works of art are not eligible for the exemption. Violation of any provision of the new tax policy could trigger fines ranging from $500 to $2,000.
More states weigh pros and cons of exempting bullion
In 2017, Tennessee lawmakers introduced two bills seeking to exempt certain sales of money, gold, silver, platinum, and palladium coins and bullion from sales and use tax: HB 342 and SB 350. Both lost steam.
Legislation that would create a tax exemption for sales of currency, certain coins, and bullion was also introduced in Kansas last year. On March 8, the House Committee on Taxation recommended House Bill 2421 be passed. Stay tuned for more details.
Learn more about taxable money in this state-by-state guide.
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