Washington Businesses Face New Tax on Precious Metals
Beginning January 1, 2024, Washington State will implement a new tax on precious metals, including gold and silver. This change marks the end of a 40-year exemption that many businesses have relied on.
Changes to Precious Metals Tax
The new tax will impose a 10.3% sales tax on transactions involving precious metals such as gold, silver, platinum, and rhodium. Additionally, businesses will face a Business and Occupation Tax, potentially driving dealers out of state.
Impact on Local Businesses
- Business owners are expressing concern over the new tax rates.
- Craig Rhyne, owner of Washington Gold Exchange, is considering relocating to Idaho.
- Rhyne estimates a $4,500 gold coin could incur an additional $450 in taxes.
Many believe consumers will seek better prices across state lines, specifically in neighboring Idaho and Oregon. “If the cost increases too much, customers will look elsewhere,” Rhyne noted.
Projected Revenue and Economic Concerns
Lawmakers expect the new tax will generate approximately $34 million in revenue every two years. However, this projection is met with skepticism by industry professionals.
- Carolyn Beko from Redmond Rare Coins worries that local coin shows may disappear due to the tax.
- Beko mentioned that the profit margins are already thin, making it challenging for businesses to adapt.
To mitigate the effects of the new tax, businesses like Redmond Rare Coins plan to sell primarily to wholesalers. This strategy allows them to bypass the retail sales tax due to the reseller permits.
Advocacy for Change
The newly formed Washington Coin and Bullion Association is actively lobbying against the tax. They encourage local residents to contact state lawmakers to advocate for the repeal of taxes on precious metals.
The upcoming tax changes are set to significantly alter the landscape for precious metal transactions in Washington, creating uncertainty for both buyers and sellers. The debate continues as businesses prepare for the impact of this new tax.
