Sound Money Movement Chalks Up Seven State Legislative Victories in 2024 - November 06, 2024

This year is shaping up to be one of the most legislatively successful in US sound money history. Money Metals Exchange was instrumental in achieving six new sound money victories, as well as one key defensive win. The upshot is that sound money legislation, carefully crafted and propelled by grassroots enthusiasm, is proving to be both practical and achievable.

The seven legislative successes, coming on the heels of five in 2023, range from new sales tax and income tax exemptions to policies that undermine the Federal Reserve’s problematic monopoly on money. Here’s the rundown:

Sales Taxes on Gold & Silver Nearing Extinction

Two states in 2024 decisively moved to eliminate sales taxes on gold and silver purchases, removing the primary friction that keeps people from exchanging fiat for constitutional money. With their governors’ signatures this year, New Jersey and Wisconsin provided tax relief to their citizens and removed a major disincentive standing in the way of people using gold and silver as money. 

Like every state, New Jersey and Wisconsin already did not charge a sales tax on other forms of investment, such as stocks, bonds, ETFs, and more. That is because typical investment assets are only taxed when sold, if a capital gain is realized. Taxing the purchase of the asset and the asset’s capital gain is double-taxation, and has no moral justification.

Wisconsin’s ending of sales taxes on gold and silver was a significant milestone that only became a reality after years of effort by sound money advocates. In spring 2024, Governor Tony Evers finally signed Assembly Bill 29 into law, eliminating sales taxes on precious metal purchases and joining the vast majority of other states that have already ended this tax. House sponsor Shae Sortwell (R - Two Rivers) emphasized its importance:

By creating this sales tax exemption, gold and silver can once again be used in Wisconsin as the historical and constitutional currency it has been. A free people can once again possess and use a currency not subject to the whims and policies of the federal government and Federal Reserve which have devalued (and certainly will again) your money through inflation.

Meanwhile, New Jersey just joined the ranks of states that have passed such exemptions. Senate Bill 721, sponsored by Majority Leader Assemblyman Louis Greenwald (D - 6) and Assemblywoman Lisa Swain (D - 38), was so popular that it did not receive a single “no” vote. The bill passed unanimously through multiple committees, 73-0 in the state Assembly, and 40-0 in the state senate.

As a top US precious metals dealer and depository with hundreds of thousands of customers, Money Metals coordinated the messaging, grassroots organizing, testimony, and lobbying through its Sound Money Defense League project. Ultimately, Governor Murphy signed Senate Bill 721 into law last month, with an effective date of January 1, 2025.

However, a caveat within the coming New Jersey law doesn’t include purchases of coins below $1,000. Meaning there’s a “poor-tax” on small-time savers and investors, undermining access to gold and silver among those who make more modest purchases of precious metals over time. 

Meanwhile, the battle to enact a sales tax exemption in Kentucky led to a constitutional standoff between the Democrat governor and the Republican legislature. Although the Kentucky state house and senate both voted overwhelmingly in favor of a bill to end sales taxes on gold and silver purchases, Governor Andy Beshear has directed the state’s Department of Revenue to continue collecting the tax, claiming his attempted line-item veto was not a violation of the state constitution.

Beshear insulted every Kentucky family seeking protection from inflation by saving in gold, sneering “if you own gold, you can afford to pay sales tax,” and he directed his Department of Revenue to prosecute any non-payers. For more information on the Kentucky constitutional standoff, click here. With Kentucky’s sales precious metals sales tax in question, the Bluegrass State is counted among the five states that still collect this backwards tax on money, along with Hawaii, New Mexico, Vermont, and Maine.

Nebraska and Alabama Eliminate Income Taxes on Gold and Silver

While almost every state in the country now has a sales tax exemption on purchases of gold and silver, abolishing income taxes on precious metals has come increasingly into focus. After all, other than sales taxes, capital gains taxes are the biggest impediment to restoring the historic role of gold and silver as money.

One of the most notable victories in 2024 was Alabama’s decision to eliminate income taxes on gains from the sale of gold and silver. Signed into law by Governor Kay Ivey, Senate Bill 297 is the latest sound money bill enacted by the Yellowhammer State, having recently expanded its precious metals sales tax exemption in 2022. Lawmakers in Alabama intend to introduce further measures in 2025. In support of the Alabama bill, lead sponsor Rep. Jamie Kiel said,

Gold and silver are constitutional money. Point blank. It makes no sense to tax money and I’m proud to stand up for the Alabama residents that are rightfully concerned about the Biden administration’s mismanagement of America’s finances and the US dollar.

Moving from the Deep South to the Midwest, Nebraska also notched a sound money win with the passage of Legislative Bill 1317. Signed into law by Governor Jim Pillen, LB 1317 ended taxes on any gold and silver capital gains, modified the definition of “bullion.” It also includes a provision that explicitly excludes a central bank digital currency (CBDC) from the state’s definition of money. The popular bill sailed unanimously out of Nebraska’s unicameral legislature, 49-0. Meanwhile, US Congressman Alex Mooney (R-WV) re-introduced the Monetary Metals Tax Neutrality Act to eliminate the federal capital gains tax on all gold and silver coins and bullion nationwide.

Utah and Louisiana Begin to Reestablish Gold’s Role as Money

Beyond taxes, states are passing measures that prompt state government investments in physical gold. Carried by Utah state Rep. Ken Ivory, House Bill 348 authorizes the state treasurer to invest a portion of funds in certain budget reserve accounts in precious metals. 

At the same time, Idaho’s liberal Republican governor actually vetoed a bill that would have permitted the Idaho state treasurer to hold a portion of state reserve funds in gold and silver bullion, breaching his fiduciary duty to the taxpayers. Holding only debt paper with negative real returns, Idaho has lost over a billion dollars in real terms since state legislators there first began proposing a gold allocation. Additionally, the measure calls for “a study analyzing the role of precious metals in augmenting, stabilizing, and ensuring the economic security and prosperity of the state, the families and residents of the state, and businesses in the state.”

In Louisiana, Governor Jeff Landry signed Senate Bill 232 into law, reaffirming gold and silver as legal tender in the state. This symbolic victory reinforces the idea that gold and silver are money even though there is no practical effect to the bill.

No States Rolled Back Prior Progress

Sadly, every year also brings attempts by tax-hungry legislators to repeal existing tax exemptions on precious metals, so the Sound Money Defense League must stay alert for these schemes. After having signed a pro-sound money bill into law earlier in the year, lawmakers almost took a huge step backwards in Nebraska by considering a measure that would have eliminated the Cornhusker State’s long-standing sales tax exemption on purchases of gold and silver. 

Upon hearing the news, the Sound Money Defense League and other in-state advocates sprang into action. Shortly after, lawmakers removed the proposed tax from the bill draft being considered. Stopping this foolish Nebraska bill dead in its tracks was a direct result of overwhelming grassroots pressure from Money Metals customers in Nebraska who lit up the state house switchboard with angry calls and emails. 

The 2024 legislative season highlights the formidable momentum that is building for sound money reforms. Gold and silver are being recognized not as mere investments, but as money that can help reinforce economic stability, maintain purchasing power, and promote freedom. With debt and inflation ravaging America—and the whole world—there is so much more work to be done.

Mises.org

*******