Is This State About To Charge Tax On Gold & Silver Again, Just A Few Years After Exempting It?

It seems, every month now, another US state is threatening to roll back their bullion sales tax exemptions to gap funding shortfalls elsewhere.

Given the ongoing retirement crisis among the baby boomer generation with woefully funded pension and liability funds, we expect this will not be that last time a state tries to reinstate another bullion sales tax provision.

by James Anderson of SD Bullion

It seems, every month now, another US state is threatening to roll back their bullion sales tax exemptions to gap funding shortfalls elsewhere.

Any resident in the state of Ohio, especially Ohio bullion buyers should now be aware, that if a new Ohio bullion sales tax gets passed, it will make investing in physical precious metals prohibitively more expensive adding nearly 6% up to 8% over current bullion product prices.

The state of Ohio is now considering a sales tax on investment-grade gold and silver coins and bars as part of the 2019 Ohio State Budget Bill. This proposed Ohio bullion tax comes on top of and in addition to the current Commercial Activity Tax (CAT), which Ohio already applies to precious metal bullion products sourced into the state.

Never mind if you have been responsible with your household budgeting, retirement planning, or the promises you have set forth for future delivery. It does not seem to matter that life is busy enough trying to keep your finances in the black and stay clear of having to use usurious consumer loans to make your budget work month to month.

It appears the state of Ohio believes they can re-pass another bullion sales tax as their Ohio bullion buying constituents may not be paying all that much attention as they are busy with their livelihoods and family responsibilities.

Rather than tax Ohio investors on equity investments in stocks like Apple or Tesla, it seems state legislature officials are now aiming at an apparent defenseless class of investors to pick on.

Bullion buyers in Ohio should let all Ohio state legislatures know it is a poor political choice for them to venture down this road.

Please join us in the fight to combat Ohio “Republican conservatives” and other Ohio state representatives, from passing another sales tax on precious metals and firmly urge them to exempt precious metals from being charged in CAT Taxes too (this simply thwarts bullion business and potential future precious metal businesses created in the state ongoing).

The following is a list of Ohio House and Senate representatives emails in an easy to use format separated by commas.

Please consider email BCC’ing all of them in chunk email blasts of a dozen or so at a time so they avert spam filters using your email program of choice.

Email Subject: Opposition to HB 166 

Dear Ohio State Legislatures,

We politely ask that you never again raise state taxes on precious metal bullion coin, bar, and round purchases.

Since the 2008 financial crisis, it has become clear that financial authorities do not have a solid grasp on the unintended consequences of their ongoing monetary policies.

We Ohio residents and Ohio bullion buyers specifically buy low price bullion coins, bars, and rounds as a prudent investment hedge against what we deem to be ongoing policies which have not proven themselves to be healthy for the United States economy long term.

We typically purchase bullion at low price premiums and save them in our great state of Ohio as many also acquire and save stocks, bonds, fiat currencies, and other liquid financial assets for our future.

By adding another Ohio bullion sales tax you will simply be punishing many of your constituents who voted you into office.

Investors in precious metals have long term memories and are politically active. 

We ask that you seriously reconsider this misguided idea and learn more about the nuances of the precious metals industry before making a mistake that will affect businesses, people’s livelihoods, your supporters, etc.

You should also consider the current CAT Tax against precious metal related businesses working on profit margins so slim, it thwarts entrepreneurs and bullion related businesses from further growth or creation within the state. They all will end up in faster growing states like Texas if we do not address this soon.

You might think that an estimated missing $5.5 million in ‘could-have-collected’ bullion state taxes is worth pursuing. That figure is highly questionable but even if accurate it is a paltry sum compared to other sources of state tax revenues.

We strongly suggest you steer clear of further punishing the Ohio precious metal buyer and industry.

Bullion buyers are smart and often highly educated. They will either discontinue buying their bullion within the state of Ohio or work around such legislation using other tactics which would make any potential gains in Ohio bullion state sales taxes likely much less a potential amount than you believe or estimate it to be worth.

The backlash you will get in that ballot box and in your political careers would be guaranteed. Bottom line, this idea a wrong one. 

Respectfully rethink what you are considering in terms of a new Ohio bullion state sales tax renewal. 

Concerned Ohio resident,

– Sign Your Name, etc.

 

OHIO CONGRESSMEN

 

OHIO SENATORS

 

Why would Ohio Vote to Tax Gold and Silver? Aren’t Gold and Silver investments?

Common in any industry, the effect of one rogue criminal can often have a profound inverse and negative impact on the sentiment towards a specific industry or business sector.

Over a decade ago, Ohio reportedly fell victim to a scheme which became known as Coingate, conducted by Ohio resident, Tom Noe, left in charge of a $50 million rare-coin investment portfolio.

The fund in 2005 attracted scrutiny by investigators for only having $13 million of the $50 million accounted for among other claims.

Tom Noe got convicted of running a criminal enterprise and the theft of the missing coins. Following that, the state of Ohio passed a short-sighted bullion sales tax on all precious metals which lasted until only a few years ago.

Here we are again.

Ohio State House Representatives only serve 2-year terms, thus many individuals currently in office have not been educated on what the difference is between rare collector numismatic coins and pure .999 fine low premium investment grade precious metal bullion coins, bars, and rounds (better for investors to buy due to their thin price premiums over their respective underlying precious metal spot prices.).

Why does Ohio currently not tax precious metals?

On January 1, 2017, Ohio became the 34th state to have a complete or partial tax exemption for precious metals when Governor John Kasich signed Senate Bill 172. This passing was in-part due to many years of efforts by industry groups including the Industry for Council for Tangible Assets (ICTA).

What other states currently impose a tax on precious metals?

A current list of US states which impose sales taxes on bullion and precious metal investment-grade products are here.

We urge all readers of those states to contact their local state representatives to encourage them to pass legislation exempting gold or silver investment-grade bullion purchases from states sales taxes.

What is the CAT Tax on why does the State of Ohio charge it on precious metals?

The state of Ohio charges a tax on most businesses with taxable gross receipts (gross receipts sourced to Ohio) exceeding $150,000 in the calendar year. The CAT is a tax that is considered a cost of doing business in this state.

In the case of precious metals, nearly every major wholesaler and retailer meets the definition to remit CAT tax to the state of Ohio for the privilege of shipping precious metals into the state of Ohio. This tax even wrongheadedly includes business to business transactions, as well as, business to consumer transactions. The Ohio precious metals CAT tax equates to 0.26% which within the bullion and precious metal wholesale market is typically over 50% of the spread or profit margin that low premium bullion dealers operate, and maintain their businesses upon.

Why should Gold and Silver Bullion be Ohio CAT Exempt?

In addition to precious metals widely considered to be an investment, gold and silver are currency whose status as money is both explicitly cited and defended in Article 1, Section 10 of the United States Constitution.

If you walked into a bank to exchange a $20 Federal Reserve note for twenty $1 Federal Reserve notes, the bank is rightfully not taxing you for the privilege of providing the product or service of the exchange.

However, if you conduct the same exchange with a one ounce US Mint American Silver Eagle coin which is stamped and declared $1 legal tender by the US Mint the transaction would be subject to Ohio CAT.

In summary, there’s no basis to justify the difference between how a paper $1 US dollar bill gets treated tax-wise compared to a legal tender .999 bullion US Mint American Silver Eagle coin.

The same case and argument could be made for any other government minted gold, silver, palladium, and platinum legal tender bullon coin.

Furthermore, gold, silver, and platinum coins, rounds, and bars of absolute purity get widely accepted as financial investments and liquid assets.

A stock exchange, such as Fidelity, is not taxed for the privilege of allowing an Ohio resident to invest in a share of Amazon stock.

Furthermore, Fidelity does not tax for the privilege of allowing Ohio residents to invest in inferior shares of GLD or SLV which are Exchange Traded Funds (ETFs) designed to mimic gold and silver spot prices, respectfully (theoretically holding bullion in vaults held and owned by the ETF bullion trust, not the unsecured shareholder).

Contrarily, precious metals dealers are subject to CAT for the privilege of allowing an Ohio resident to invest in a physical ounce of gold, silver, and platinum.

Just yet another example of the little investor being again potentially taken advantage of, as they are not paying political attention to ongoings at the state legislative level.

What can I do to help in education representatives in the House and Senate on state sales tax on precious metals?

Please consider contacting the list of representatives above.

If you have the time, please also call them and explain to them why investment grade precious metals should be tax exempt just like any other investment vehicle. As it relates to Ohio, this is currently in the House of Representatives.

Today’s potential Ohio bullion sales tax warning is a red alert for Ohio bullion buyers who want to keep the cost basis for their investments cost-effective and reasonable in terms of potential performance.

We need to let them hear our vote and objection to this wrong-headed Ohio bullion sales tax proposal.

 

ICTA recommends the following for contacting your Ohio state reps to discourage the renewal of this bullion sales tax:

1. Call or send an email INDIVIDUALLY to each of the Representatives on the committee using their respective online email forms here. (Select each representatives’ picture to access their telephone number and email form.)

2. The subject of the email: [  Opposition to HB 166  ]

3. The first priority of the email is to respectfully make your point.

4. The second priority is to be concise. Please choose a few points to make that will fit on one page. Personalize comments as you wish, but DO NOT use words like collectible, hobby, rare coins, etc… that will concern the committee that other hobbies will want the same. This is not the same situation, but they do not know that. We are not exaggerating this very important instruction.

5. Identify yourself so they know you are a Ohio constituent and provide your address and telephone number.

6. If you are a bullion dealer, mention the name of your business and how long you have been in business.

7. Please call or send your email as soon as possible before Friday. It will be impressive if the committee hears from several people interested in keeping this exemption. It makes a difference!

 

OHIO CONGRESS OFFICE PHONE NUMBERS

District # First Name Last Name Phone Number Email
1 Scott Wiggam 614-466-1474 [email protected]
2 Mark Romanchuk 614-466-5802 [email protected]
3 Haraz Ghanbari 614-466-8104 Haraz.G[email protected]
4 Robert Cupp 614-466-9624 [email protected]
5 Tim Ginter 614-466-8022 [email protected]
6 Phillip Robinson 614-644-6041 [email protected]
7 Thomas Patton 614-466-4895 [email protected]
8 Kent Smith 614-466-5441 [email protected]
9 Janine Boyd 614-644-5079 [email protected]
10 Terrence Upchurch 614-466-7954 [email protected]
11 Stephanie Howse 614-466-1414 [email protected]
12 Juanita Brent 614-466-1408 [email protected]
13 Michael Skindell 614-466-5921 [email protected]
14 Bride Sweeney 614-466-3350 [email protected]
15 Jeffrey Crossman 614-466-3485 [email protected]
16 Dave Greenspan 614-466-0961 [email protected]
17 Adam Miller 614-644-6005 [email protected]
18 Kristin Boggs 614-466-1896 [email protected]
19 Mary Lightbody 614-466-4847 [email protected]
20 Richard Brown 614-644-6002 [email protected]
21 Beth Liston 614-644-6030 [email protected]
22 David Leland 614-466-2473 [email protected]
23 Laura Lanese 614-466-9690 [email protected]
24 C Allison 614-466-8012 [email protected]
25 Bernadine Kent 614-466-5343 [email protected]
26 Erica Crawley 614-466-8010 [email protected]
27 Tom Brinkman 614-644-6886 [email protected]
28 Jessica Miranda 614-466-8120 [email protected]
29 Louis Blessing 614-466-9091 [email protected]
30 William Seitz 614-466-8258 [email protected]
31 Brigid Kelly 614-466-5786 [email protected]
32 Catherine Ingram 614-466-1645 [email protected]
33 Sedrick Denson 614-466-1308 [email protected]
34 Emilia Sykes 614-466-3100 [email protected]
35 Tavia Galonski 614-644-6037 [email protected]
36 Anthony DeVitis 614-466-1790 [email protected]
37 Casey Weinstein 614-466-1177 [email protected]
38 Bill Roemer 614-644-5085 [email protected]
39 Fred Strahorn 614-466-1607 [email protected]
40 Phil Plummer 614-644-8051 [email protected]
41 Jim Butler 614-644-6008 [email protected]
42 Niraj Antani 614-466-6504 [email protected]
43 J. Smith 614-466-2960 [email protected]
44 Paula Hicks-Hudson 614-466-1401 [email protected]
45 Lisa Sobecki 614-644-6017 [email protected]
46 Michael Sheehy 614-466-1418 [email protected]
47 Derek Merrin 614-466-1731 [email protected]
48 Scott Oelslager 614-752-2438 [email protected]
49 Thomas West 614-466-8030 [email protected]
50 Reggie Stoltzfus 614-466-9078 [email protected]
51 Sara Carruthers 614-644-6721 [email protected]
52 George Lang 614-466-8550 [email protected]
53 Candice Keller 614-644-5094 [email protected]
54 Paul Zeltwanger 614-644-6027 [email protected]
55 Gayle Manning 614-644-5076 [email protected]
56 Joseph Miller 614-466-5141 [email protected]
57 Dick Stein 614-466-9628 [email protected]
58 Michele Lepore-Hagan 614-466-9435
59 Don Manning 614-466-6107 [email protected]
60 John Rogers 614-466-7251 [email protected]
61 Jamie Callender 614-644-6074 [email protected]
62 P. Lipps 614-644-6023 [email protected]
63 Vacant 614-466-3488 [email protected]
64 Michael OBrien 614-466-5358 [email protected]
65 John Becker 614-466-8134 [email protected]
66 Doug Green 614-644-6034 [email protected]
67 Kris Jordan 614-644-6711 [email protected]
68 Rick Carfagna 614-466-1431 [email protected]
69 Stephen Hambley 614-466-8140 [email protected]
70 Darrell Kick 614-466-2994 [email protected]
71 Scott Ryan 614-466-1482 [email protected]
72 Larry Householder 614-466-2500 [email protected]
73 Rick Perales 614-644-6020 [email protected]
74 Bill Dean 614-466-1470 [email protected]
75 Randi Clites 614-466-2004 [email protected]
76 Vacatnt 614-644-5088 [email protected]
77 Tim Schaffer 614-466-8100 [email protected]
78 Ron Hood 614-466-1464 [email protected]
79 J. Kyle 614-466-2038 [email protected]
80 Jena Powell 614-466-8114 [email protected]
81 James Hoops 614-466-3760 [email protected]
82 Craig Riedel 614-644-5091 [email protected]
83 Jon Cross 614-466-3819 [email protected]
84 Susan Manchester 614-466-6344 [email protected]
85 Nino Vitale 614-466-1507 [email protected]
86 Tracy Richardson 614-466-8147 [email protected]
87 Riordan McClain 614-644-6265 [email protected]
88 Bill Reineke 614-466-1374 [email protected]
89 Steven Arndt 614-644-6011 [email protected]
90 Brian Baldridge 614-466-2124 [email protected]
91 Shane Wilkin 614-466-3506 [email protected]
92 Gary Scherer 614-644-7928 [email protected]
93 Ryan Smith 614-466-1366 [email protected]
94 Jay Edwards 614-466-2158 [email protected]
95 Don Jones 614-644-8728 [email protected]
96 Jack Cera 614-466-3735 [email protected]
97 Adam Holmes 614-644-6014 [email protected]
98 Brett Hillyer 614-466-8035 [email protected]
99 John Patterson 614-466-1405 [email protected]

 

OHIO SENATE OFFICE PHONE NUMBERS

District # First Name Last Name Phone Number Email
1 Robert McColley 614-466-8150 [email protected]
2 Theresa Gavarone 614-466-8060 [email protected]
3 Tina Maharath 614-466-8064 [email protected]
4 William Coley 614-466-8072 [email protected]
5 Stephen Huffman 614-466-6247 [email protected]
6 Peggy Lehner 614-466-4538 [email protected]
7 Steve Wilson 614-466-9737 [email protected]
8 Lou Terhar 614-466-8068 [email protected]
9 Cecil Thomas 614-466-5980 [email protected]
10 Bob Hackett 614-466-3780 [email protected]
11 Teresa Fedor 614-466-5204 [email protected]
12 Matt Huffman 614-466-7584 [email protected]
13 Nathan Manning 614-644-7613 [email protected]
14 Joseph Uecker 614-466-8082 [email protected]
15 Hearcel Craig 614-466-5131 [email protected]
16 Stephanie Kunze 614-466-5981 [email protected]
17 Bob Peterson 614-466-8156 [email protected]
18 John Eklund 614-644-7718 [email protected]
19 Andrew Brenner 614-466-8086 [email protected]
20 Vacant 614-466-8076 [email protected]
21 Sandra Williams 614-466-4857 [email protected]
22 Larry Obhof 614-466-7505 [email protected]
23 Nickie Antonio 614-466-5123 [email protected]
24 Matt Dolan 614-466-8056 [email protected]
25 Kenny Yuko 614-466-4583 [email protected]
26 Dave Burke 614-466-8049 [email protected]
27 Kristina Roegner 614-466-4823 [email protected]
28 Vernon Sykes 614-466-7041 [email protected]
29 Kirk Shuring 614-466-0626 [email protected]
30 Frank Hoagland 614-466-6508 [email protected]
31 Jay Hottinger 614-466-5838 [email protected]
32 Sean OBrien 614-466-7182 [email protected]
33 Michael Rulli 614-466-8285 [email protected]

Thank you for your help in letting OH representatives hear your opposition to renewing bullion sales taxes.

Please do let your state representatives hear from you if you are opposed to this Ohio bullion state sales tax renewal.

Related Discussion with ITCA’s Jimmy Hayes about bullion state sales taxes ongoing.


 

About the Author

James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.

James’ twitter is @JamesHenryAnd and he has authored SD Bullion’s complementary 21st Century Gold Rush Book.

 

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