Which States Have No Tax on Gold?

Taxes – the nemesis of many an investor and pretty much everyone, really.  Can you imagine someone actually enjoying them?  I cannot imagine that they would be very popular at parties.  I digress, though – today, we are here to discuss taxes as they relate to investing, particularly when it comes to precious metals.

While it is not exactly something fun for us to keep in the back of our minds as we make our purchases, I do think that it is worth keeping track of.  In our current age of contending with so much inflation and extra fees, it only seems appropriate to discuss it now.  So, if you would like to know more about taxes and which ones are applied to precious metals, this is the article for you!

Why Gold, anyway?

Before we get too much further, it would probably be a good idea to explain why we are even talking about this in relation to gold in the first place!  While I know it might sound a bit strange, it does appear to be one of the assets getting the most coverage in the new year.  There are plenty of blogs such as this one that are covering it.

If you were not aware, precious metals are a type of commodity that is considered to be fairly valuable to add into an investment portfolio.  There are a few reasons for this, namely that something such as gold can be utilized as a sort of hedge against inflation.  All that means is that it is not impacted by inflation rates nearly as much as paper currency, so it can be a way to store wealth during times of crisis.

In addition to that, there is great precedent from the past that supports this style of investing as well!  You see, looking into our history, we can see many examples of those who utilize precious metals as a way to demonstrate their great wealth and status.  In other words, it was (and still is) used as a status symbol.

How the Internal Revenue Service (IRS) Taxes Gold

Be sure to pay attention here, since this is quite important if you have ever been considering investing in precious metals.  In most parts of the country, there is a taxation on gold.  You see, this is enforced by the IRS (which is a federal institution), meaning that most of these rules will apply unanimously.  Why is there taxation on it?

The answer is simple: it is considered a collectible in the eyes of the Internal Revenue Service.  Therefore, they apply a roughly twenty-eight percent tax rate on it (at the high end of things).  While this is quite irritating, there is really no way to get around it.  Thus, you will probably want to find a state that does not add any additional price tag to the bullion you want to purchase.

You can find an example of that here, https://suttergoldmining.com/buy-gold-and-silver-in-portland/, if you are not sure where to start.  On the federal level, you will be taxed more the longer that you have owned your collectible assets.  Remember, because of that classification, they will inherently have higher rates than other types of investments.

Some nuances do exist, as you can probably imagine.  Pretty much all of them have to do with what I mentioned previously – that length of time clause.  So, for an example, if you were to buy gold bullion in January and then sell it in September, the tax collected on it would be normal income tax.  It is when you hold it for longer that the collectible aspect comes into play, so be sure to keep track of when you make your purchases and when you sell them on the market again.

Sales tax is going to be on the state level, if you were wondering about how that comes into play.  It is probably worth doing your research to determine if your particular state charges extra sales tax.  Places like Texas do not, making it a popular choice for sourcing vendors.

Unfortunately, in some parts of the country, the rules and regulations do appear to be a bit arbitrary.  Certain states establish thresholds in which there will be more taxation or less based upon an evidently random dollar amount.  So, that is why I would recommend that you do some of your own research as well.  After all, I cannot exactly cover all fifty states here today, let alone touch upon the other United States territories as well!

Are Precious Metals Still Worth it…?

Understandably so, these aspects of gold investing make some people get cold feet.  However, allow me to explain why this is still worth your time.  The costs seem steep, so you know the positives are going to be good, right?

While it might seem a bit far-fetched, I think that you will find that there is still plenty to be pleased about in regard to investing in precious metals.  For one thing, you can utilize bullion as a way to hedge your wealth against inflation!  In other words, you are protecting your current net worth from the dreaded claws of inflation, which decreases the value of paper money.

Beyond that, you can also consider the fact that there is little chance that gold, silver, platinum, or palladium are going to lose their value in the coming decades.  Part of what makes a precious metal qualify for that category is their inherent rarity.  So, with the demand remaining high and the supply remaining low, I think you know how that will impact the pricing.

Seeing as there are a few ways that we use these metals right now (mostly in manufacturing), it is even less likely that they will decrease in price on the global market.  Sure, these are just a few considerations, but it is hard to deny that they more than make up for the extra costs that you are taking on as a gold investor.

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