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North Dakota (ND) provides a favorable tax environment for precious metals investors through a sales tax exemption on qualifying bullion and legal tender coins. The exemption applies to high-purity bullion (≥ 99.9% fineness) and all coins and currency that constitute legal tender, while lower-purity items and non-legal-tender rounds or medallions remain taxable.
Federal taxation rules apply when precious metals are sold at a profit, and North Dakota taxes capital gains as part of state income tax — though the state's rates are among the lowest in the country and long-term gains receive a partial exclusion.
Precious metals such as gold and silver are classified as collectibles under U.S. federal tax law. Profits realized when selling investment metals may therefore be subject to federal capital gains tax, with a maximum rate of 28%, depending on income level and holding period.
Capital gains tax generally applies when metals are sold for fiat currency or exchanged for goods and services. No tax is due simply for purchasing or holding bullion.
North Dakota applies three progressive income tax rates: 0%, 1.95%, and 2.50%, making it one of the lowest-tax states for income. North Dakota also allows taxpayers to deduct 40% of their long-term capital gains income, significantly reducing the effective state tax rate on precious metals sold after being held for more than one year. Short-term capital gains are taxed as ordinary income at the standard rates.
North Dakota exempts qualifying precious metals from state sales tax under N.D.C.C. § 57-39.2-04(31). The exemption has two components:
Legal tender coins and currency: All legal tender coins and currency, including legal tender coins issued by foreign nations, are exempt from sales tax. This covers standard bullion coins such as American Gold and Silver Eagles, Canadian Maple Leafs, and other government-issued coins with legal tender status, regardless of their purity level.
Investment bullion (bars, ingots): Precious metal bullion refined to a purity of not less than 999 parts per 1,000 (99.9% fineness) and whose value depends on its precious metal content and not its form is exempt from sales tax.
Items that remain taxable include:
The statewide base sales tax rate is 5%, with local sales taxes potentially increasing the combined rate in some municipalities.
North Dakota is a tax-friendly state for precious metals investors. Qualifying bullion at ≥ 99.9% purity and all government-issued legal tender coins are exempt from sales tax. On the capital gains side, North Dakota combines some of the lowest state income tax rates in the country (maximum 2.50%) with a 40% exclusion on long-term capital gains, resulting in a very low effective tax burden when selling appreciated precious metals held long-term.
Investors purchasing lower-purity products such as 90% silver coins that lack legal tender status, or non-government rounds and medallions, should be aware that those products remain taxable at the combined state and local rate.