Taxing precious metals is a controversial issue in the state of Pennsylvania. For over a decade there has been a tax exemption on bullion, which covers anything that is valued for its content (actual scrap value) as opposed to the item itself. However, there have been propositions by the local government to change this, including a recent proposal by Governor Tom Wolf to levy a 6.6% sales tax.
The tax exemption does not cover coins and bars, as they are valued not necessarily for their metal content, but for their rarity. These include coins, medals, bars, and even rounds. In such cases the statewide sales tax rate of 6% applies. And, as is usually the case, there are additional sales taxes in certain regions, with a total tax of 7% applied in Allegheny County and 8% in Philadelphia.
Across the entire United States, the Federal Capital Gains Tax applies to many forms of investment, including precious metals. You will pay a maximum 28% tax on any profit you make from trading precious metals (the actual rate depending on your personal income). This does not apply if you sell for a loss or if you simply hold onto those precious metals as they increase in value but, as soon as you profit, you owe the government Federal Capital Gains Tax.
If you want to avoid sales tax in Pennsylvania, go for bullion coins and bars, those whose value is derived from their composition as opposed to their rarity. You will pay no sales tax on standard gold and silver bars, nor on coins such as the Maple Leaf, the Gold and Silver Panda, the US Eagle, the Perth Mint Lunar Series and the Silver Britannia. When you invest in coins that are perceived to be rare, carrying a value much greater than the worth of their precious metal content, you can expect to be charged sales tax.
Pennsylvania is often known as the founding state, because this is where the first capital of the United States was established, and where a great deal of history was made. In the modern United States, Pennsylvania is not as grand as it once was. It is the 33rd largest state by size and the 6th by population. Its biggest and most well-known cities are Pittsburgh and Philadelphia, homes to the Steelers and the Eagles, cheesesteaks and the Liberty Bell.
Because Pennsylvania was the capital of the United States in the early days, this is where the first mint was established back in 1792 as part of the Coinage Act. It is from this mint that the first coins of the United States were produced, so it is from here that the richest economy in the world was born. Many coins minted in Pennsylvania have gone on to sell for millions of dollars.
To discover if you have a piece that was minted here in the early days, simply look for the “P” mark on the coin. You can also check the year etched onto the coin.
Note: GoldBroker cannot provide tax, legal, or other advice, so if you are not sure about the taxation to your personal circumstances, we recommend that you seek independent advice from a qualified professional.
All of these texts were accurate at the time of writing, but tax laws are constantly changing and it’s not easy to keep track of those changes. Because of this, we can not be held responsible for any false or out-of-date information.