TAXES IN WASHINGTON

Thanks to WAC 458-20-248, sales of qualifying precious metals (such as gold, silver, platinum, and palladium bullion) are exempt from Washington state sales tax. Established in 1985, this rule applies to precious metal bullion and monetized bullion, which includes coins or bars that are recognized as currency in the United States or other countries.

This means that coins such as the American Gold Eagle, Silver Eagle, Canadian Maple Leaf, and other widely recognized bullion coins are not subject to sales tax when purchased in Washington State.

However, numismatic coins, commemorative coins, and other collectible precious metal items are subject to Washington’s sales tax. The state sales tax is 6.5%, but in certain regions, local sales taxes apply, bringing the total tax to as high as 10.25% in some areas, including Seattle and King County.

Federal Capital Gains Tax

While Washington State does not impose a general state income tax, the federal government taxes capital gains on precious metals. The IRS considers precious metals to be collectibles, which means:

• Short-term capital gains (held for 1 year or less) are taxed as ordinary income (up to 37%).
• Long-term capital gains (held for more than 1 year) are taxed at a maximum of 28%, regardless of your income level.

Additionally, as of 2022, Washington imposes a 7% state capital gains tax on long-term capital assets exceeding $250,000. However, this tax does not apply to sales of physical precious metal bullion, but may apply to investment vehicles such as ETFs or futures contracts.

Tax Free Precious Metals

To avoid sales tax, buyers in Washington State should focus on bullion coins and bars that qualify as exempt under WAC 458-20-248. Rare and collectible coins are subject to sales tax, which can be as high as 10.25% in some areas, including Seattle.

The most commonly available tax-free bullion products include coins and bars minted by reputable institutions such as:

• United States Mint (e.g., American Gold/Silver Eagles, American Buffalo coins)
• Royal Canadian Mint (e.g., Gold/Silver Maple Leaf coins)
• Perth Mint (e.g., Australian Kangaroo/Nugget coins)

By purchasing bullion instead of collectible coins, investors in Washington State can legally avoid state sales tax and minimize tax burdens.

Source: http://app.leg.wa.gov/WAC/default.aspx?cite=458-20-248

About Washington

The state of Washington, named after George Washington, has a population of 7 million, making it the 13th most populated state of the union. It’s known for its lumber production as well as making and exporting everything from aircraft and missiles, to metals and foods.

Grunge and Coffee

The largest and most populated city in the state of Washington is Seattle. As well as being home to Fraser, the popular situation comedy, it spawned the grunge era and bands such as Nirvana, Pearl Jam and Soundgarden. Seattle also gave the world Starbucks, which has over 20,000 stores in 65 different countries, making it one of the largest and fastest-growing chains anywhere.

Seattle is also arguably the birthplace of modern computing, where Bill Gates was born and raised, and where he pieced together the first ideas for what would become Microsoft, the powerful organization that helped usher in the Age of Technology that we live in.