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Taxation of Precious Metals and IRS Reporting Requirements

Taxation of Precious Metals and IRS Requirements

How to Buy Gold and Silver Tax-Free

Can I Buy Gold and Silver Tax-Free?

When investing, many people try to find how to buy gold and silver tax-free. We understand that many investors and collectors want to keep their privacy when making purchasing decisions related to buying and selling gold and silver. However, the IRS mandates that we have to report particular sales and some buyback transactions.

But, not every purchase or sale of precious metals needs to be documented and reported. With Bullion Exchanges, you can learn how to sell and buy gold and silver tax-free without losing your privacy. Keep in mind that IRS reporting requirements can vary by state and change. Therefore, always double-check information where you live before you buy.

Why is there an Online Sales Tax?

When you want to buy gold and silver tax-free, do not forget that certain states charge a sales tax, even if you buy online. This is because, in June 2018, the Supreme Court decided to reverse the 1992 precedent from the court case in Quill, North Dakota. The original case was Quill Corp v. North Dakota (“Quill”) in which North Dakota said it was missing out on sales tax from online shoppers and wanted to charge tax on items shipped to the state. At this time, the court ruled in favor of the company, noting that because Quill Corp. had no physical presence in North Dakota, the state could not demand sales tax.

However, in 2018, the South Dakota v. Wayfair Inc court case reversed this ruling. South Dakota claimed that it was losing revenue from local sales tax, especially because online shopping has expanded significantly. This time, the court ruled in favor of the state. As a result, online stores are now required to abide by sales tax rules incumbent on the state retailers ship to.

Therefore, even though many of our customers shop online, you may be subject to state and local tax. Certain factors that may affect your order include a tax on particular individual products or taxes on the entire order. Additionally, the tax rate is subject to vary. These factors are derived from the address we are shipping your order to, and this includes if we are shipping to a storage facility.

Sales Tax Laws by State

When you want to buy gold and silver tax-free, be sure to check your local and state laws before you buy. Here at Bullion Exchanges, we want to make it easy for our customers. We compiled a list of the most current tax laws, simplified. We hope you find this information helpful and feel free to use this page to find out more about your state’s tax laws. Don’t forget, you can always reach out to a tax professional, and you should definitely rely on your state’s websites for more up-to-date information.

Not every state charges online sales tax. If you are buying online and shipping to another state, whichever state we ship to is the one you will pay tax for if required. All sales taxes for orders from Bullion Exchanges will be calculated at checkout. Sales tax calculation is based on the state’s taxability of the specified products and the exact tax rates set forth by the taxing jurisdiction of the address we ship to. You can buy gold and silver tax-free from Bullion Exchanges online if you are ordering from Alaska, Delaware, New Hampshire, Montana, and Oregon. These states do not impose any online sales tax as of 2020.

Here’s a list of states that apply online sales tax, and which bullion and/or numismatic products are affected by the tax.

Alabama State information	Alabama sales tax applies to specific products only, all other products are exempt. Alabama collects flat-rate Simplified Sellers Use Tax of 8% on: All copper products. All numismatic coins with a value exceeding the precious metal content resulting from rarity, condition, age, etc. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.)
Alaska State Information	As of this writing, Alaska does not collect sales tax. For more updated information, please check the Alaska State Department of Revenue website.
Arkansas State Information	Arkansas does not collect sales tax on gold, silver, platinum, or palladium bullion products. Sales tax applies to specific items listed below: All copper products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.)
Arizona State Information	Arizona does not collect sales tax on gold, silver, platinum, or palladium bullion products. Sales tax applies to specific items listed below: All copper products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.)
California State Information	California sales tax is collected on specific products listed below: Non-monetized bullion consisting of copper, platinum, or palladium Single sales of “monetized bullion”, non-monetized gold or silver bullion, or numismatic coins less than $1,500 USD. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.). All other products are exempt from sales tax in California.
Colorado State Information	Colorado sales tax only applies to specified products listed below: All copper products. Numismatic and bullion coins that are not, and have never been, used as currency or any other kind of economic exchange in the world. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Colorado.
Connecticut State Information	Connecticut sales tax only applies to specific products listed below: All copper, platinum, and palladium products. Precious metal numismatic coins that are not and have never been used as legal tender based under any government in the world. Any single sales transaction consisting of gold and silver when the total sale value is less than $1,000 USD. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Connecticut.
Delaware State Information	As of this writing, Delaware does not collect sales tax. For more up-to-date information, please check the Delaware State Department of Revenue website.
District of Columbia State Information	Washington DC sales tax applies to all items Bullion Exchanges sells and ships to the state. The sales tax rate is calculated upon checkout.
Florida State Information	As of July 1, 2021, Florida sales taxes are based on the transaction total, not on a per-item basis. However, there are exemptions. Sales tax exemptions for Florida include: Coins and currency that are US legal tender. Coins and any other currency with a face value of more than $500. Gold, silver, and platinum bullion whose price exceeds $500 is not taxable.
Georgia State Information	Georgia sales taxes apply to specific products listed below: All copper or palladium products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Georgia.
Hawaii State Information	Hawaii applies general excise taxes on all items sold and shipped to the state. The sales tax rate is calculated upon checkout. However, Bullion Exchanges does not currently ship to Hawaii.
Idaho State Information	Idaho sales taxes apply to specific products listed below: All copper products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Idaho.
Illinois State Information	Illinois sales tax applies only to specific products listed below: All copper or palladium products. Any bullion product manufactured with a purity of less than .980. Any coins issued by a US state aside from Illinois. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Illinois.
Indiana State Information	Indiana sales tax is applied only to specified products. Indiana law provides a sales tax exemption for IRA and IDA eligible coins. Coins exempt from Indiana Sales tax include American Eagle Coins and American Eagle Proof Coins, as well as the following: Gold coins, bars, or rounds with a purity of .995 (99.5%) or higher Silver coins, bars, or rounds with a purity of .999 fine (99.9%) or higher Platinum coins, bars, or rounds with a purity of .9995 (99.95%) or higher Palladium coins, bars, or rounds with a purity of .9995 (99.95%) or higher Note: Transactions involving the sale of the following coins do not qualify for tax exemptions in Indiana and remain subject to tax, as they fall under the “collectible” category and are not permitted investments by an IRA or by an IDA: Austrian Corona Belgian 20 Franc British Britannia Chilean 100 Peso Dutch 10 Guilder French 20 Franc Hungarian 100 Korona Italian 20 Lira Mexican 20 Peso South African Krugerrand Swiss 20 Franc U.S. Buffalo Proof U.S. Liberty Gold Coin Other Collectible or Rare Coins Other items taxable under Indiana state law include: Accessories - Such as holders, tubes, coin flips, and similar apparel. Processed items - Such as products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.)
Iowa State Information	Iowa sales tax applies to specific products listed below: All copper bullion products. Any coins that are not, and have never been, used as currency or any other kind of economic exchange in the world. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Iowa.
Kansas State Information	Kansas sales tax applies only to specific products listed below: All copper products. All coins that are not made of gold or silver. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) Bullion Exchanges is registered and responsible for collecting tax through eBay. All other products are exempt from sales tax in Kansas.
Kentucky State Information	Kentucky applies excise taxes on all items Bullion Exchanges sells and ships to the state. The sales tax rate is calculated upon checkout.
Louisiana State Information	Louisiana sales tax applies only to specific products listed below: All copper or palladium products, except numismatic coins. Any individual sale of numismatic coins if the total sale value is greater than $1,000 USD. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Louisiana.
Maine State Information	Maine sales tax applies to all items Bullion Exchanges sells and ships to the state. The sales tax rate is calculated upon checkout.
Maryland State Information	Maryland sales tax applies only to specific items listed below: All copper products. Any single sales transaction consisting of gold, silver, platinum, or palladium when the total sale value is less than $1,000 USD. All numismatic coins. Coins or any kind of currency made from a precious metal that is not or has never been used as a medium of exchange in the world. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Maryland.
Massachusetts State Information	Massachusetts sales tax applies only to specific products listed below: All copper, platinum, and palladium products. Any single sales transaction less than $1,000 USD consisting of numismatic coins, gold and silver bullion products, or gold or silver legal tender of any country. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Massachusetts.
Michigan State Information	Michigan sales tax only applies to specific products listed below: All copper or palladium products. Any gold, silver, or platinum products with a purity of less than .900. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Michigan.
Minnesota State Information	Minnesota collects sales tax on all transactions, unless the items satisfy the exemption below: Any gold, silver, platinum, or palladium bars or rounds that are at least 99.9% (by weight) purity, and are marked with weight, purity, and content This exemption does not apply to the following: Sales of coins, jewelry, works of art, and scrap metal. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.)
Mississippi State Information	Mississippi applies use taxes on all items Bullion Exchanges sells and ships to the state of Mississippi. The sales tax rate is calculated upon checkout.
Missouri State Information	At this time, Missouri does not require remote sellers to collect sales tax. This information is subject to change, so check on the official Missouri Department of Revenue website for up-to-date information.
Montana State Information	As of this writing, Montana does not collect sales tax as a whole. For more updated information, please check the Montana State Department of Revenue website.
Nebraska State Information	Nebraska sales tax is applied only to specific products listed below: All copper bullion products. Coins that are currently not and have never been used as legal tender. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than its original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Nebraska.
Nevada State Information	Nevada sales tax is applied only to specific products listed below: All copper products. Coins and bullion are not used as a medium of exchange. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Nevada.
New Hampshire State Information	As of this writing, New Hampshire does not collect sales tax. For more updated information, please check the New Hampshire State Department of Revenue website.
New Jersey State Information	New Jersey sales tax applies to all items Bullion Exchanges sells and ships to the state of New Jersey. The sales tax rate is calculated upon checkout.
New Mexico State Information	New Mexico sales tax applies to all items Bullion Exchanges sells and ships to the state of New Mexico. The sales tax rate is calculated upon checkout.
New York State Information	New York sales tax is applied only to specified products. Single sales transactions are taxed, which is calculated based on individual invoices, not on a line-item basis. Anything not listed here is not taxable by New York. Sales tax for New York applies to: All copper products. All bullion products if the total value of the sale is less than $1,000 USD. All bullion products if the total value of the sale is greater than $1,000 USD and the bullion products were also further enhanced, processed, assembled, or otherwise altered by the buyer. All bullion products if the total value of the sale is greater than $1,000 USD and the price of the products is valued for more than its metal content. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) Please note: sales tax does not apply to your purchase if the total amount exceeds $1,000 USD and the following premiums are not surpassed: 140% for silver coins 120% for gold coins that weigh 1/4 troy oz or less 115% to all other coins If you are purchasing bars and/or ingots, the total sales amount must not exceed 115% of the cash price of such metals.
North Carolina State Information	North Carolina sales tax is applied only to specific products listed below: All copper products. Any products that have not gone through a smelting or refining process. All coins whose value does not exceed its statutory or nominal value. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in North Carolina.
North Dakota State Information	North Dakota sales tax is applied only to specific products listed below: All copper products. All precious metal bullion that has not been refined to at least a .999 purity. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in North Dakota.
Ohio State Information	Ohio sales tax is applied only to specified products. Under House Bill 110, any items not listed here are tax exempt by the state of Ohio as of October 1st, 2021. Sales tax for Ohio applies to: All copper products All supplies Gold and silver bezels
Oklahoma State Information	Oklahoma sales tax is applied only to specific products listed below: All copper products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Oklahoma.
Oregon State Information	As of this writing, Oregon does not collect sales tax as a whole. For more updated information, please check the Oregon State Department of Revenue website.
Pennsylvania State Information	Pennsylvania sales tax is applied only to specific products listed below: All copper products. Coins that are currently not and have never been used as legal tender in the US or any country. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Pennsylvania.
Rhode Island State Information	Rhode Island sales tax is applied only to specific products listed below: All copper products. Any bullion products that have not gone through a smelting or refining process. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Rhode Island.
South Carolina State Information	South Carolina sales tax is applied only to specific products listed below: All copper or palladium products. Coins that are currently not and have never been used as legal tender in the US or any country. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in South Carolina.
South Dakota State Information	South Dakota sales tax is applied only to specific products listed below: All copper products. All numismatic coins with a value exceeding the precious metal content resulting from rarity, condition, age, etc. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in South Dakota.
Tennessee State Information	Tennessee does not collect sales tax on gold, silver, platinum, or palladium bullion products. Sales tax applies to specific items listed below: All copper products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) .
Texas State Information	Texas sales tax is applied only to specific products listed below: All copper or palladium bullion products. All copper, platinum, and palladium coin products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Texas.
Utah State Information	Utah sales tax is applied only to specific products listed below: All copper or palladium bullion products. All bullion products made of gold, silver, or platinum if the content is below 50%. All numismatic coins except those that are used as legal tender. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Utah.
Vermont State Information	Vermont sales tax applies to all items Bullion Exchanges sells and ships to the state of Vermont. The sales tax rate is calculated upon checkout.
Virginia State Information	Virginia sales tax is applied only to specific products listed below: All copper or palladium bullion products. All gold, silver, or platinum bullion if the metals are not refined in any way. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Virginia.
Washington State Information	Washington State sales tax is applied only to specific products listed below: All copper products. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Washington.
West Virginia State Information	West Virginia sales tax is applied only to specified products. Anything not listed here is not taxable by West Virginia. Sales tax for West Virginia applies to: All copper products except for numismatic coins, or is a form of money or legal tender with a fair market value higher than its face value. Any products that have not gone through a smelting or refining process. Any product that has been smelted or refined in some way, but is sold in a state where its value is derived from its form rather than its content. All coins are not numismatic coins and are not used as money or legal tender. All coins are used as money/legal tender but their fair market value does not exceed their face value. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than their original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All sales of investment metal bullion or coins, that are either gold silver, platinum, or palladium, are exempt from sales tax in West Virginia.
Wisconsin State Information	Wisconsin sales tax applies to all items Bullion Exchanges sells and ships to the state of Wisconsin. The sales tax rate is calculated upon checkout.
Wyoming State Information	Wyoming sales tax is applied only to specific products listed below: All copper products. All uncoined bullion of any precious metal content. Accessories, such as holders, tubes, coin flips, and similar apparel. Processed items, which means products that were processed by third parties and have more value than its original precious metals content (e.g. colorized coins, black ruthenium/gold plated coins, etc.) All other products are exempt from sales tax in Wyoming.

The information given about precious metal taxes in this article is just a general guide and should not be misunderstood as tax advice. Seeking professional assistance is advised for any specific information regarding precious metal tax rules and regulations. Detailed information can also be found at www.irs.gov.

Capital Gains Tax on Gold, Silver, and All Precious Metals

When you sell gold, silver, and other precious metals, you might be wondering if you need to pay taxes on the sale. Because gold, silver, and platinum are considered capital assets, capital gains taxes could potentially apply to your items.

The IRS identifies precious metals as collectibles, so they could be taxed at a maximum gains rate of around 28%. This does not mean every product has this high 28% rate attached: Capital gains taxes vary by the item.

But, taxes for your bullion will not be calculated until after the sale of your item(s). Therefore, if you have any precious metals in your ownership (or in a depository), the capital gains tax is not yet applied. It will, however, be calculated according to how long you held onto the precious metals, and the ordinary income tax rate. So, the capital gains tax also varies depending on whether it is short-term or long-term.

Sometimes people receive precious metals as a gift or an inheritance. If you sell them for more than what you paid for, then it is most likely you will have to pay tax when you sell your product. If you sell them at a loss, however, no capital gains taxes are applied. Capital gains tax is not automatically calculated during the sale, and it must be recorded on your annual tax filings. You only need to pay this tax once a year.

We make no claims this overview is accurate and it is not meant to be interpreted as tax advice. Therefore, Bullion Exchanges recommends you discuss this with your CPA or tax professional for more information.