The Arkansas Senate just overwhelmingly approved a bill which helps Natural State citizens protect themselves from federal dollar devaluation.
Introduced by Senator Mark Johnson and Representative Delia Haak, Senate Bill 336 removes sales and use tax on purchases of gold, silver, platinum, and palladium coins and bullion in Arkansas. Arkansas Senators voted 30-1 to pass this measure onto the Arkansas House of Representatives.
Under current law, Arkansas citizens are discouraged from insuring their savings against the devaluation of the dollar because they are penalized with taxation for doing so. Passage of this measure would remove disincentives to holding gold and silver for this purpose. SB 336 is important for a few reasons:
- Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. Arkansas does not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments.
- Levying sales taxes on precious metals is inappropriate. Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is “consuming” the good. Precious metals are inherently held for resale, not “consumption,” making the application of sales taxes on precious metals inappropriate.
- Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers will take their business to neighboring states, such as Alabama or Louisiana (which have eliminated or reduced sales tax on precious metals), thereby undermining Arkansas jobs. Levying sales tax on precious metals harms in-state businesses who will lose business to out-of-state precious metals dealers. Investors can easily avoid paying $136.50 in sales taxes, for example, on a $1,950 purchase of a one-ounce gold bar.
In total, 39 states have reduced or eliminated sales tax on the monetary metals.
- Taxing precious metals is harmful to citizens attempting to protect their assets. Purchasers of precious metals aren’t fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals as a way to preserve their wealth against the damages of inflation. Inflation harms the poorest among us, including pensioners, Arkansans on fixed incomes, wage earners, savers, and more.
This measure is one of many sound money bills being introduced across the country this year. Bills to remove taxation on sound, constitutional money are also being, or have been, introduced in Alabama, Hawaii, Iowa, South Carolina, Tennessee, and more.
Backed by the Sound Money Defense League, these measures protect Arkansas citizens by removing barriers to insulating their wealth with the only money proven to protect against the Federal Reserve Note’s ongoing devaluation.
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