How will Washington’s new sales and B&O taxes change pricing and cross‑border bullion purchases with neighboring states?
Executive summary
Washington removed a long-standing exemption for precious metal bullion and monetized bullion effective January 1, 2026, making retail sales of bullion subject to retail sales tax and gross receipts subject to B&O tax (Retailing classification) while wholesale sales with reseller permits fall under Wholesaling B&O rules [1] [2]. The immediate pricing impact is a visible sales-tax added to purchases and an upstream B&O tax that dealers may pass to customers, which is likely to reduce in-state physical bullion demand and push some buyers across state lines or into paper substitutes [3] [4].
1. What changed, in plain terms
The Department of Revenue and the implementing legislation (ESSB 5794) repealed the exclusion that had treated bullion like financial instruments for sales tax purposes; starting Jan. 1, 2026 bullion and monetized coins are taxable tangible personal property subject to retail sales tax for consumer sales and B&O tax on gross receipts for retailers, with wholesale sales taxed under the wholesaling B&O classification when a reseller permit is presented [1] [2] [3].
2. How the new taxes translate to retail prices
Retail purchases will now carry state and local retail sales tax rates layered on top of the metal’s spot-plus-premium price—Washington’s combined rates can approach double-digit percentages in some jurisdictions—so an immediate and mechanically calculable markup equal to the applicable sales tax will apply at point of sale [5] [6]. Separately, because the B&O tax is levied on gross receipts and not profit, dealers face tax exposure on the full sale amount; industry reporting and tax-analysis pieces note dealers typically pass that cost through either directly or via wider bid-ask spreads, effectively raising the consumer price beyond just the sales-tax line item [3] [5].
3. Dealer behavior and local market effects
Coin shops and bullion dealers warned of sharp declines in local retail volume and survival risk for thin-margin shops, arguing a combined sales-tax-plus-B&O hit will squeeze margins and change inventory strategies; some dealers accelerated December 2025 sales and have publicly urged clients to buy before the change [7] [8]. Sources show dealers and trade groups are pursuing legislative rollbacks and have filed bills to restore exemptions—indicating sustained political and commercial resistance that could alter implementation or compliance practices if successful [9] [10].
4. Cross‑border purchasing and substitution dynamics
Because neighboring Oregon and Idaho historically did not tax bullion at retail, observers and lawmakers predict shoppers will increasingly buy across state lines or online from out-of-state dealers to avoid Washington sales tax, reducing in-state sales volumes—this cross-border arbitrage is already cited as a core expected response and a rationale for legislative attempts to reverse the change [10] [4]. Market commentary also suggests some buyers will shift to paper-based instruments (ETFs such as GLD/SLV) or to custody arrangements that avoid retail purchase tax exposure, moves that financial commentators say could decrease physical local holdings even if overall investor exposure to metals remains [4].
5. Uncertainties, counterarguments and hidden agendas
Fiscal projections cited in reporting expect modest state revenue (roughly $55–60 million cited in industry commentary), which critics frame as small relative to the damage to local dealers; supporters argue the change eliminates a long-standing preferential tax treatment and broadens the tax base—this reveals an implicit policy trade-off between revenue neutrality/fairness and economic impact on a specific industry [5] [3]. The timeline for any legislative reversal is uncertain: bills to reinstate exemptions were filed for 2026 but success depends on majority control and political will, so short-term market effects are likely even if longer-term legal changes remain possible [10].
6. Bottom line — who pays and where buyers will go
The direct, calculable price change is the addition of retail sales tax on top of spot-plus-premium, plus an indirect likely pass‑through of B&O costs into dealer spreads, meaning effective costs to Washington buyers will rise materially [1] [3]. That combined increase creates a concrete incentive for Washington purchasers to seek out-of-state dealers, online sellers, ETFs, or wholesale/reseller routes if eligible—responses already predicted and partly visible in early trading and dealer commentary—while ongoing political challenges make the policy’s permanence uncertain [4] [10].