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 consquences 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 constituants 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 entreprenuers 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 gauranteed. 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.
Why would Ohio Vote to Tax Gold and Silver? Aren’t good 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.
OHIO HOUSE OF REPRESENTATIVE OFFICE PHONE NUMBERS
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OHIO SENATE OFFICE PHONE NUMBERS
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