Purchasing (or Selling) Gold and Silver in Utah
Admitted to the union in 1896, Utah is home to more than three million people. The 31th most populated state in the union and the 13th in area, Utah is the tenth least densely populated state in the United States. Utah has started to take modest steps to cultivate an environment more conducive to sound money ownership and use.
What are the Laws on Gold & Silver in Utah?
- Utah State Sales Tax Laws
- Utah Capital Gains Laws
- Utah Legal Tender Laws
- Utah Depository Laws
- Utah State Reserves Laws
- Coin Shops in Utah
Utah State Sales Tax Laws?
Utah has started the process of freeing gold and silver from bureaucratic shackles.
Utah law has a product-based exemption for sales and use tax. This exemption covers "sales of an ingot, bar, medallion or decorative coin containing at least 50 percent gold, silver or platinum that is not legal tender of any nation."
For more information on rolling back sales tax on constitutional money, click here.
Utah Capital Gains Tax?
Utah law, like most states, is chock full of draconian revenue statutes.
Despite this, under current law, gold and silver are not subject to capital gains taxation when exchanged for Federal Reserve notes or when used in barter transactions in the state of Utah. The passage of HB 317 in 2011 includes "a nonrefundable credit established for any capital gains incurred from the exchange of gold and silver coin issued by the federal government for another form of legal tender."
Income taxes are one major way government bureaucrats penalize holders of precious metals. If you own gold to protect against the ongoing devaluation of America's paper currency (which results from the inflationary practices of the Federal Reserve), you may end up with a "gain" on your gold when it's priced in dollars. Not necessarily a real gain, mind you. It's frequently nothing more than a nominal gain -- but it's nonetheless considered income against which the government assesses a tax.
However, other state legislators across the country have started to recognize that paying taxes on nominal gains is beyond the pale. Arizona recently eliminated capital gains taxation on precious metals, and Idaho hopes to follow soon.
For more information on capital gains taxation of precious metals, click here.
Utah Legal Tender?
Gold and silver have been explicitly made legal tender in the state of Utah. Passed in 2011, House Bill 317 reads "gold and silver coin issued by the federal government is legal tender in the state."
The subject of legal tender laws is an important one. Philosophically, it is important to follow the United States Constitution which states in Article I, Section 10, "No state shall...make anything Thing but gold and silver Coin a Tender in Payment of Debts."
Legislative acts that take steps towards this constitutional requirement are slowly gaining steam. Utah and Oklahoma are leaders in this field, declaring gold and silver legal tender within their states.
Unfortunately, Utah has taken any steps to reaffirm its constitutional duty to treat gold and silver coins as legal tender, including requiring state courts to enforce gold (and silver) clause contracts as Oklahoma and Utah did with the recent passage of SB 862 and HB 157, respectively.
Oklahoma’s SB 862 reads, in part, “gold and silver coins issued by the United States government are legal tender in the State of Oklahoma. No person may compel another person to tender or accept gold or silver coins that are issued by the United States government, except as agreed upon by contract.”
Utah’s HB 157 reads, in part, “except as expressly provided by contract, a person may not compel any other person to tender or accept legal tender.”
The phrase, “except as agreed upon by contract,” has significant ramifications. This wording reaffirms the court’s ability, and constitutional responsibility according to Article I, Section 10, to require specific performance when enforcing such contracts. If voluntary parties agree to be paid, or to pay, in gold and silver coin, the Oklahoma courts may not substitute any other thing, e.g. Federal Reserve Notes, as payment.
Gold clause contracts are a useful tool to give both creditors and borrowers alike protection against the currency risks resulting from both inflation and deflation. For more information on gold clause contracts, click here.
Practically speaking, recognition of gold and silver as legal tender is important because it marks a fundamental shift of how the government views the metals. Acknowledging the legal tender status of gold and silver would mean that the state would treat gold and silver as currency rather than an asset. It generally follows that no state taxes should be levied when the precious metals are used or exchanged.
For more information on the issue of legal tender laws, click here
Utah Depository Laws?
Utah law does not currently allow for a state bullion depository.
However, in 2017, Representative Ken Ivory introduced House Bill 224. HB 224 "grants the State Money Management Council rulemaking authority to make reules governing quality criteria for a commercial specie repository."
For the purposes of this bill, "commercial specie repository" is defined as "an institution that holds or receives deposits of specie legal tender that is located within the state."
Unfortunately, House Bill 224 did not make it across the finish line this legislative session, but Utah continues to take steps in the right direction as is continues to establish itself as an ambassador for the cause of sound money.
Texas is championing the state depository cause and other states will likely follow suit. In June of 2015, Texas Governor Greg Abbott signed House Bill 483 into law.
Authored by Representative Giovanni Capriglione (R-Southlake), this bill allows for "the establishment and administration of a state bullion depository."
According to the official Texas Depository website, House Bill 483 "allows for the nation's first state bullion depository to be established in Texas under the supervision of the state's comptroller's office."
Upon signing the bill, Governor Greg Abbott said "with the passage of this bill, the Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside our state."
Utah Holding Reserves in Gold and Silver?
Financially prudent individuals set aside surplus funds to protect against unforeseen expenditures. This way, when faced with loss of income, house repairs, car trouble, or anything else, they will have a buffer against unanticipated downturns.
In the same vein, almost every state in the United States has established a “savings account” for government operations. Primarily to mitigate a decline in tax revenues that comes alongside economic slumps, states have created so-called budget stabilization funds – colloquially known as “rainy day funds.”
Unfortunately, like every other state in the union, Utah does not hold any of its reserves in gold and silver.
While Utah may not hold its reserves in gold and silver yet, Tennessee is setting an example by considering legislation that would allow for this. Tennessee Representative Bud Hulsey introduced House Bill 0777 in 2017 which "requires the state treasurer to invest 40 percent of the funds in the rainy day fund in gold bullion of other precious metal bullion." This bill will be voted on in 2018.
For more information on Budget Stabilization Funds, click here.
Coin Shops in Utah
Featured Coin Shops
All About Coins
1123 E 2100 S
Salt Lake City, UT 84106
Monarch Coin Corporation
211 E 3900 S
Salt Lake City, UT 84107
Ace Coins Inc.
1659 4100 S
Murray, UT 84123