The New Jersey Assembly recently made a significant move by voting unanimously to abolish sales taxes on physical gold and silver through Assembly Bill A5294. This legislation exempts purchases of precious metals over $1,000 from state sales taxes, bringing New Jersey in line with the majority of states that have already eliminated this tax.
This achievement reflects years of dedication from the Sound Money Defense League, Money Metals Exchange, and local supporters. Taxing precious metals has become outdated across the United States, with 43 states having already abandoned this practice. Most recently, Mississippi discontinued this tax, following Alabama, Virginia, and Tennessee in the past few years. It’s high time for New Jersey to join this progressive trend and alleviate this financial burden on its residents.
Taxing sound money doesn’t align with its nature, as precious metals are primarily held for resale, not consumption. Furthermore, studies have demonstrated that this taxation method is inefficient for revenue collection. All of New Jersey’s neighboring states have recognized this and exempted gold and silver from sales taxes, a move that New Jersey should emulate to support local businesses and retain economic activity within its borders.
Exempting precious metals from sales taxes also brings New Jersey in line with the United States Constitution, which explicitly mentions gold and silver as money. This shift could soon align the Garden State with 44 other states, including New York, Pennsylvania, and Delaware, that do not tax gold and silver investments.
Assemblyman Kevin J. Rooney, sponsoring the bill, emphasized the competitive advantage this change would offer. Removing sales tax ensures residents don’t need to seek these purchases outside the state, benefitting local businesses and citizens alike.
Dealers specializing in precious metals and coins in New Jersey have long struggled against the attraction of lower prices and tax exemptions in neighboring states. With the surge in gold and silver values, investors have increasingly sought these items, particularly silver coins and bars, as a hedge against economic instability.
Rooney highlighted that any potential revenue loss from the sales tax exemption would likely be compensated by retaining businesses and buyers within the state. This legislation could mark a positive change by recognizing that people invest in metals and coins to secure their financial futures, aligning tax rules accordingly.
If enacted, the exemption would retroactively apply from March 1, 2023. This move not only positions New Jersey favorably in the Sound Money Index but also enhances its economic competitiveness while championing sound money principles. The Sound Money Defense League commends the Assembly for its unanimous support and urges the state Senate to acknowledge the overwhelming grassroots backing and advance this initiative.