Last week, a New Jersey Senate committee passed a bill that would exempt gold and silver bullion coins from state sales and use taxes. Enactment of this legislation would not only relieve some of the tax burdens on investors, but it would also eliminate one barrier to using gold and silver in everyday transactions, a foundational step for people to undermine the Federal Reserve's monopoly on money.

Rep. Louis Greenwald introduced Assembly Bill 5294 (A5294) on Mar. 16. The legislation would exempt the sale of investment metal bullion and investment coins from the state sales and use tax.

Investment metal bullion is defined as "any elementary precious metal that has been put through a process of smelting or refining, including, but not limited to, gold, silver, platinum, and palladium, and that is in such a state or condition that its value depends on its content, not its form." An "investment coin" is defined as "any numismatic coin manufactured of gold, silver, platinum, palladium, or any other metal, including non-precious metals, and having a fair market value of not less than $1,000."

On Dec. 21, the Senate Budget and Appropriations Committee passed A5294 by a 12-1 vote. Earlier this year, the Assembly passed A5294 by a 74-0 vote.

The Senate committee amended the bill to also exempt receipts or revenue derived from the sale of investment metal bullion and investment coins.

KNOCKING DOWN BARRIERS

Currently, 43 states have eliminated sales taxes on gold and silver bullion. Repealing sales taxes on precious metal bullion takes a step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs. As Sound Money Defense League policy director Jp Cortez testified during a committee hearing on a similar bill in Wyoming in 2018, charging taxes on money itself is beyond the pale.