(Salem, Oregon, USA – July 28, 2023) – With the stroke of her pen, Oregon Gov. Tina Kotek put an end to the state's punitive Corporate Activity Tax as applied to precious metals dealers and, ultimately, to gold and silver investors, effective in 2024.
Supporting the efforts of in-state small business owners, the Sound Money Defense League and Money Metals Exchange mobilized grassroots support and worked in other ways to secure the passage of House Bill 2073, a package of corporate activity tax (CAT) reforms and cleanups which included the exemption of precious metals sales from Oregon's CAT.
Gold and silver businesses operate on extremely small margins—margins that are similar in scale to brokerages, which are already exempt from the CAT. A CAT imposed on topline precious metals sales revenue is therefore extremely burdensome when compared to the taxes paid by other current CAT payers.
Furthermore, these increased costs on precious metals businesses ultimately are passed through to Oregon savers and investors.
Oregon is among the 43 states that do not directly impose sales taxes on precious metals, but Oregon's Corporate Activity Tax (CAT) had been doing this in a back-door manner.
"It's bad public policy to penalize small-time savers and investors—as well as the businesses that support them," said Stefan Gleason, president of Idaho-based Money Metals Exchange. "The trend across the nation is to reduce the costs and obstacles in the way of preserving wealth in the form of gold and silver."
Mississippi, Alabama, Tennessee, and Virginia passed legislation within the last two years to exempt precious metals-related purchases from taxation in their states. Oregon is the latest state to promote sound money by removing the CAT from precious metals dealers and their customers.
Sound money advocates have targeted the elimination of discriminatory tax policies that discourage precious metals ownership reducing the likelihood that citizens will take steps to insulate themselves from the inflation and financial turmoil that flows from the Federal Reserve System.
Sound Money Defense League policy director Jp Cortez testified in support of House Bill 2073, making the following public policy arguments:
- Taxing gold and silver harms in-state businesses. It's a competitive marketplace, so buyers will take their business to neighboring states (which have all eliminated or reduced taxes on precious metals), thereby undermining Oregon businesses and jobs.
- Gold and silver are the only money mentioned in the U.S. Constitution. Article 1, Section 10 states that "no state shall make any Thing but Gold and Silver a tender in payment of debts." Therefore, the exchange of one form of U.S. money for another should not be taxed.
- Taxing precious metals businesses is harmful to small-time savers. Purchasers of precious metals aren't usually fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money, seeking to preserve their wealth against the damages of inflation.
"Oregon should not be increasing the costs of saving in a proven inflation hedge—especially considering the economic danger that currently faces the nation. Inflation harms the poorest among us, including pensioners, Oregonians on fixed incomes, wage earners, savers, and more," said Cortez.
"We congratulate Oregon on enacting House Bill 2073, and we encourage other states to follow their lead in promoting sound money principles and reducing obstacles to wealth preservation," Cortez concluded.
The Sound Money Defense League is a non-partisan public policy group working nationally to restore sound money at the state and federal levels.
About the Author:
Jp Cortez is a graduate of Auburn University and a resident of Charlotte, North Carolina. He is the Policy Director of the Sound Money Defense League, an organization working to bring back gold and silver as America's constitutional money. Follow him on Twitter @JpCortez27