Advocates for sound money are celebrating a significant victory today as New Jersey has officially eliminated sales taxes on purchases of gold, silver, and other precious metals above $1,000, effective January 1, 2025.
With the signing of Senate Bill 721 by Governor Phil Murphy, New Jersey now joins 44 other states in recognizing the importance of exempting constitutional sound money from burdensome taxation.
Backed by the Sound Money Defense League, Money Metals Exchange, and local activists, Senate Bill 721 received unanimous support from both Democratic and Republican sponsors, totaling 13 formal sponsors.
Stefan Gleason, president of Money Metals and Chairman of the League, highlighted the significance of New Jersey’s decision: “In 2024, New Jersey was one of seven states to have passed legislation that removes taxes on precious metals, reaffirms gold and silver as constitutional money, empowers state treasurers to invest in physical gold, and more.”
Gleason added, “Our work isn’t done,” indicating that efforts will continue to target states like New Mexico, Maine, Vermont, Hawaii, and Kentucky, which still impose sales tax on metals.
The elimination of sales taxes on precious metals is supported by several key reasons:
- Taxing precious metals is inappropriate as they are primarily held for resale rather than consumption, making them unsuitable for traditional sales tax.
- Studies show that taxing precious metals is an inefficient form of revenue collection, potentially resulting in lost revenue from economic activities.
- Taxing gold and silver harms local businesses as buyers may seek alternatives in neighboring states, affecting in-state jobs.
- Taxing precious metals unfairly targets certain savers and investors who use these metals as a form of saving and investment.
- Taxing precious metals harms citizens seeking to protect their assets against inflation, impacting vulnerable groups like pensioners and wage earners.
Jp Cortez, executive director of the Sound Money Defense League, emphasized the grassroots effort that led to the passage of S721 in New Jersey, calling it a victory for sound money legislation.
However, a drawback of S721 is the inclusion of a “poor tax” provision that discriminates against small savers making purchases below $1,000. New Jersey is one of few states with such a provision, impacting its ranking on the Sound Money Index.
Image credit: Nicolas Raymond/Flickr
Loading…