How have neighboring states’ bullion tax rules changed, and can Washington residents legally avoid use tax by buying out of state?
Executive summary
Washington repealed a decades‑old sales‑and‑use tax exemption for precious‑metal bullion effective January 1, 2026, making retail purchases of gold, silver and qualifying coins subject to retail sales tax and B&O tax [1] [2]. Neighboring states generally remain more favorable to buyers — Idaho and Oregon are repeatedly referenced as not taxing bullion — but Washington’s use‑tax rules mean simply buying out of state does not automatically eliminate tax liability for residents [3] [4] [5].
1. What changed in Washington and why it matters
The Washington Legislature’s 2025 law repealed the long‑standing exemption that treated certain bullion and monetized coins like investment instruments rather than ordinary tangible goods; starting Jan. 1, 2026 those sales are taxable as retail sales and subject to the retailing B&O classification and sales tax collection obligations [1] [2] [6]. The fiscal rationale cited in reporting and by state auditors was alignment with ordinary tax treatment and fiscal revenue — the change is projected to raise tens of millions biennially — while opponents argue it undermines investment neutrality and local dealers [7] [8] [9].
2. How neighboring states’ rules compare
Reporting and industry statements show several nearby jurisdictions continue to exempt bullion or lack a general sales tax: Idaho and Oregon are cited repeatedly as not taxing bullion purchases, and Montana’s absence of a state sales tax makes it effectively non‑taxing for such purchases [3] [4] [10]. Industry groups and dealers warn that repeals in Washington (and Maryland) will redirect commerce across borders to states with favorable treatment, a point emphasized by the National Coin & Bullion Association and local shops [9] [11]. These contrasts have prompted proposed rollback legislation in Washington for the 2026 session aimed at restoring the exemption [4].
3. Can Washington residents legally avoid use tax by buying out of state?
Washington’s use‑tax framework treats out‑of‑state purchases that are brought into Washington for use or storage as potentially subject to Washington use tax, meaning a resident who buys bullion elsewhere and brings it back generally owes Washington tax unless a specific exemption applies [5] [2]. Wholesale purchases with a valid reseller permit are treated differently — resellers can buy without retail sales tax provided proper documentation and the sale is wholesaling for resale — but that does not offer a straightforward loophole for retail buyers [6] [2]. Several dealers note that online sellers must charge Washington tax when shipping to Washington addresses, closing that sales‑tax avoidance route for mailed purchases [5].
4. Practical and legal implications, and the open questions
Practically, buyers face three clear options reflected in reporting: purchase inside Washington and pay the new tax; purchase in another state and risk Washington use‑tax assessment if the bullion is brought or stored in Washington; or arrange resale/reseller flows with proper permits if genuinely engaging in wholesale commerce [5] [6]. The reporting documents both government intent to tax these transactions and industry warnings about cross‑border commerce; it also records active political pushback in Olympia to reverse the change [8] [4]. This account does not establish whether specific residency, storage‑outside‑the‑state strategies, or carrier/warehouse arrangements will defeat Washington’s use‑tax enforcement in individual cases, because the cited sources summarize policy and industry reaction without adjudicating complex factual scenarios [2] [5].