Against the backdrop of high inflation rates and geopolitical uncertainty, states are increasingly enacting measures that encourage saving in precious metals and even using gold and silver as money.
With five bills signed into law in 2023, sound money reforms are gaining momentum across the United States.
Money Metals' Sound Money Defense League project has emerged as an influential force, actively engaging in legislative battles by prompting intense grassroots support, drafting legislation, recruiting bill sponsors, and providing expert testimony directly to lawmakers.
Twenty-five states considered 50 pieces of legislation this year aimed at ending taxes on the monetary metals, strengthening state finances by investing reserve funds in physical gold, establishing in-state depositories, and more.
The 2024 Sound Money index, published by Money Metals Exchange, provides a full rundown on how each state stacks up in this important policy area.
Ending Sales Tax on Gold and Silver Is a Winning Issue
The vast majority of states have now eliminated taxes on the purchase of precious metals.
In 2023, Mississippi became the 43rd state to do so, following the recent examples set by Ohio and Arkansas in 2021 and Tennessee in 2022.
That leaves just seven sales tax states: New Mexico, Hawaii, Wisconsin, Kentucky, Maine, New Jersey, and Vermont.
Of these seven states, five considered legislation in 2023 to end the tax.
New Jersey hopes to become the 44th sales-tax-exempt state. Assembly Bill 5294 passed unanimously through the State Assembly by a vote of 74-0, and a Senate committee unanimously passed the bill this week.
Meanwhile, Money Metals leaders collaborated with legislators in Wisconsin to introduce Assembly Bill 29 and Senate Bill 33. These measures have garnered support from 24 cosponsors representing both sides of the aisle, with a hearing expected soon.
The Alaska State House passed HB 3, the bill seeking the end to borough and city sales taxes on sound money. The measure will be considered by the Senate when the legislature reconvenes in early 2024.
In Kentucky, Rep. Steven Doan sponsored House Bill 213 as a single-issue bill, but Republican leaders insisted on incorporating the language that would end sales taxes on precious metals into a broader bill covering multiple topics.
Despite broad support in the House, Senate leaders specifically removed the sound money provision, thwarting the effort in 2023.
The most contentious sound money battles of 2023 unfolded in Augusta, Maine, when Sen. Eric Brakey introduced Legislative Draft 1051 to end sales taxes on gold and silver purchases.
The bill passed 17-15 out of the Maine Senate. On the House side, it received two favorable votes. However, Democrat majority leadership pressured its members, ultimately flipping enough votes to defeat the bill 71-72 during the final vote.
And finally, Vermont lawmakers introduced House Bill 295 to end the sales tax on sound money… as did lawmakers in Minnesota. But neither received a hearing.
The Next Step: Ending Capital Gains Tax on Precious Metals
While states can't do anything about the federal capital gains tax on gold and silver sales (a confiscatory 28% tax rate!), a few states have sought to remove their own income taxes on sound money.
In 2023, Arkansas passed House Bill 1718, ending all remaining tax liability on transactions involving the metals, including the state capital gains tax. The popular measure passed overwhelmingly. That leaves 39 states that still tax capital gains on the sale of gold and silver.
A profit on sales of gold and silver may only be nominal in nature – i.e. the "gain" is usually a reflection of the Federal Reserve note's loss in purchasing power.
Legislators in Iowa, Kansas, Maine, Mississippi, Missouri, South Carolina, and West Virginia all introduced such measures, with committees in Iowa, Kansas, and Missouri giving "Do Pass" recommendations.
Not Just Taxes: States Considering Other Sound Money Bills
In 2023, Missouri, Oklahoma, and Tennessee considered legislation to establish their own in-state depositories to store gold held by the state or by residents.
In North Carolina, the Sound Money Defense League worked with lawmakers in Raleigh on House Bill 721, legislation that directs the state treasurer to study all aspects of acquiring, storing, and insuring physical gold or bitcoin held on behalf of the state.
Idaho considered House Bill 180, a measure that would help protect state reserve funds with an allocation to physical gold. This bill passed through the Idaho House before being halted by the Senate State Affairs committee.
In the Volunteer State, Senate Bill 519 and House Bill 1479 authorized the Tennessee State Treasurer to invest state funds in physical gold and silver. Gov. Bill Lee signed it.
In Oregon, Money Metals Exchange and the Sound Money Defense League fought to end Commercial Activity Tax (CAT) on precious metals dealers. House Bill 2073 was a package of corporate activity tax (CAT) reforms and cleanups, including an exemption of precious metals sales.
This pro-sound money measure was signed into law by Oregon Gov. Tina Kotek in July.
And finally, Governor Ron DeSantis signed H 737 to exclude precious metals dealers in Florida from onerous regulations, including mandates for long holding periods on acquired inventory and requirements to make burdensome, privacy-destroying government filings.
The progress achieved in 2023 gives us reasons to be optimistic. With each legislative victory, we move one step closer toward the goal of restoring sound money in America.
Jp Cortez is the Executive Director for the Sound Money Defense League, a non-partisan, national public policy group working to restore sound money at the state and federal level, and lead author of the Sound Money Index.
