Volunteer State Ends Tax on Coins, Currency, and Bullion
Tennessee has gained a complete sales-tax exemption on the retail sales of coins, currency, and precious-metals bullion.
Tennessee has gained a complete sales-tax exemption on the retail sales of coins, currency, and precious-metals bullion. On April 27, 2022, the Tennessee House substituted Senate Bill 1857: Exempts certain sales of gold, silver, platinum, and palladium coins and bullion from the sales and use tax, for House Bill 1874, and passed Senate Bill 1857. The Senate concurred on April 28, 2022. The exemption will take effect upon receiving the governor’s signature or 10 days after it reached the governor’s desk if he takes no action.
“Over the last seven years, Representative Bud Hulsey and Senator Frank Nicely have shown unrelenting perseverance in an effort to get this measure passed,” said NCBA executive director David Crenshaw. “The dedication of Representative Hulsey and Senator Nicely in sponsoring and championing their bills through multiple Assembly sessions has never wavered, and dealers Col. Steven Ellsworth (ret.), David Hall, and Bruce Paulhamus gave their efforts a much-needed shot in the arm in 2019, when they formed the Tennessee Precious Metals, Coin & Currency Coalition and hired Bass, Berry & Sims to lobby for us. Ellsworth’s determination, especially, rallied the state’s dealers and collectors to help push this exemption through.”
Last year Representative Ron Gant and Senator John Stevens introduced companion bills to exempt certain sales of gold, silver, platinum, and palladium coins and bullion from the sales and use tax. House Bill 514 and Senate Bill 870 were introduced on February 4, 2021, and February 11, 2021, respectively. The Tennessee Precious Metals, Coin & Currency Coalition hired a lobbyist team from Bass, Berry & Sims to monitor the progress of each bill as they moved through the state’s legislative process. The House Finance, Ways & Means Subcommittee placed HB 514 behind the budget, and the Senate Finance, Ways and Means Subcommittee referred SB 870 with a negative recommendation. Unfortunately, as with the Hawaii legislature early in 2021, a provision in the American Rescue Plan Act of 2021 halted any further action to include the bill in the budget. The legislature adjourned sine die, not to reconvene until January 2022.
In the summer of 2021 the Tennessee Advisory Commission on Intergovernmental Relations studied the feasibility of a gold depository in Tennessee. Although the study found that there was not enough demand for such a depository to be viable, the report did suggest that the General Assembly should “consider a sales-tax exemption for precious metal coins and bullion if it becomes clear that the exemption will not violate the American Rescue Plan Act.” November saw U.S. District judge L. Scott Coogler of the Northern District of Alabama issue an injunction in favor of a lawsuit brought forward by 13 states, alleging that the provision in the American Rescue Plan Act that limited state tax cuts was unconstitutional. This court injunction halted enforcement of that provision in the act limiting state tax cuts and opened the way for new bills to move through the assembly during the 2022 session to create an exemption for coins and bullion.
In 2022 Representative Bud Hulsey agreed to sponsor and champion House Bill 1874: As introduced, exempts certain sales of gold, silver, platinum, and palladium coins and bullion from the sales and use tax. Its companion bill was Senate Bill 1857, sponsored by Senator Frank Nicely. SB 1857 was referred to the Senate Finance, Ways and Means Committee with a negative recommendation from the Senate Finance, Ways and Means Revenue Subcommittee on March 1, 2022, and placed on the calendar to be heard April 19, 2022, although its companion bill, HB 1874, was placed behind the budget in the House. Neither of these bills appeared to be moving and would most likely not be considered further during the 2022 session.
As the coalition and NCBA continued investigating other options to create an exemption this year, SB 1857 was placed on the Senate Finance, Ways, and Means Committee calendar for April 26, 2022. This committee recommended the bill for passage, and the next day the Senate passed the bill, 25 to 5. The bill was then sent to the House where it was substituted for its companion HB 1874. A very minor language change to the bill was adopted, which revised the criterion to refer to sales based “primarily” on intrinsic value as precious material or collectible items. The House passed the bill unanimously.
“It has been a long road to get Tennessee a coin, currency, and bullion sales-tax exemption. The way the dealers and collectors of our state have stepped up to contact their legislators has made a huge difference,” said Col. Ellsworth. “We are so glad the way opened to get our exemption passed this year. We are thankful for the efforts of Representative Hulsey and Senator Nicely, our legal team at Bass, Berry & Sims, and the National Coin & Bullion Association’s executive director, David Crenshaw, and board member Pat Heller in reaching our goal.”
Tennessee now joins 40 other states that have complete or partial sales-tax exemptions on the retail sales of coins, currency, and precious-metals bullion. Of those states, five (Alaska, Delaware, Montana, New Hampshire, and Oregon) have no state sales tax at all, while the other 35 states had enacted legislation and adopted regulations to exempt such merchandise. That leaves only nine states and the District of Columbia that still charge sales taxes on the retail sales of coins, currency, and precious-metals bullion.
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Source: National Coin and Bullion Association
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