State Legislatures Eye Sound Money Reforms
More state lawmakers than ever are introducing sound money legislation in the opening days of the 2021 legislative session.
Several states will consider measures to remove sales or general excise taxes from the purchases of gold, silver, and other precious metals.
Many other states will weigh bills to eliminate income taxes on gold and silver.
Still others will decide whether state funds can be held in physical gold and silver -- and may even consider establishing a state-chartered bullion depository.
With debt-funded spending and money-printing in our nation’s capital at breakneck speed, will states see the wisdom of enacting measures to counteract these policies of currency debasement?
Here’s a rundown on newly introduced state legislation:
In Mississippi, House Bill 375, sponsored by Representative Henry Zuber and Representative Brady Williamson, and House Bill 978, sponsored by Representative Joel Bomgar, include language to exempt precious metals from sales taxes.
Two of Mississippi’s neighbors, Alabama and Louisiana, have already exempted precious metals from sales taxes – so the Magnolia State will continue to be at a competitive disadvantage if it maintains its current policy of taxing real money.
South Carolina’s Representative Stewart Jones just introduced three sound money measures. House Bill 3378 excludes from gross income any net capital gain derived from the exchange of precious metals bullion.
And Jones’s House Joint Resolution 3379 would create a committee to explore the feasibility of a state-chartered metals depository. Finally, the representative from Laurens, South Carolina, has put forward House Bill 3377, which reaffirms that gold and silver are money.
Building on prior efforts to make precious metals purchases tax-free, Tennessee Senator Rusty Crowe introduced Senate Bill 251.
Meanwhile, Tennessee Representative Bud Hulsey and Senator Paul Rose introduced House Bill 353 and Senate Bill 279, respectively. These bills would create a study commission regarding a gold depository for the Volunteer State and a report of findings to the state Senate and House of Representatives.
In Arkansas, a measure that would eliminate the sales tax on precious metals purchases has been submitted for introduction by Representative Delia Haak, Representative Robin Lundstrum, and Senator Mark Johnson. Senator Johnson introduced a similar measure in 2019.
In Alabama, Representative Andrew Sorrell will re-introduce a measure to remove income taxes from gold and silver. While Alabama enacted a precious metals sales tax exemption into law in 2018, the original bill sponsor, Senator Tim Melson, plans to introduce a bill this year to clear up some ambiguity in the 2018 language and to push out a sunset provision for another 5 years.
Way to the west, Representative Val Okimoto and Representative Dale Kobayashi in Hawaii have introduced House Bill 1184, a measure to exempt precious metals from Hawaii’s general excise tax.
And Idaho Representative Ron Nate and Senator Steven Vick have put forward House Bill 7 to permit the State Treasurer to hold a portion of state funds in physical gold and silver. Idaho hopes to join Ohio and Texas as one of the few states make such a move to secure state assets against the risks of inflation and financial turmoil and/or to achieve capital gains as measured in Federal Reserve Notes.
Washington State removed sales taxes against sound money decades ago, but a lawmaker hopes to take it a step further. House Bill 1417, introduced by Representative Rob Chase and co-sponsored by Representative Bob McCaslin, seeks to eliminate all Evergreen State taxes on the only form of money mentioned in the U.S. Constitution.
Sound money forces could face some defensive battles in 2021 as well.
Fortunately, here are now 39 states that have removed some or all sales taxes from precious metals. But during the shortened 2020 session, revenue-hungry politicians in Maryland, Pennsylvania, and Washington State tried to buck the trend and repeal those sales tax exemptions.
All three of these recent attempts to reinstate taxes on the monetary metals have been defeated, but taxpayers should be wary of their return.
By communicating with lawmakers, providing testimony, and igniting a vocal grassroots response, the Sound Money Defense League and its allies continue to make the case for sound money and to defend the existence of current sound money policies.
Massive debt-financed government spending in response to COVID-19 has reemphasized the importance of sound money.
As state legislatures and Congress consider actions in the face of a global pandemic and an unprecedented economic meltdown, they would be wise to remove the disincentives that stand in the way of protecting citizens and their states with sound, constitutional money.