What options do Washington residents have for legally holding precious metals without triggering state sales or use tax?
Executive summary
Washington repealed its long-standing sales- and use-tax exemption for precious-metal bullion and monetized bullion effective January 1, 2026, making retail sales of qualifying gold, silver and coins subject to state and local retail sales tax and to B&O tax when sold to end consumers [1] [2]. Several narrow legal workarounds remain—buying before the deadline, purchasing through wholesale/reseller channels with proper permits, using out‑of‑state purchases or storage, and relying on differing tax treatments for numismatic or manufactured forms—but each carries practical limits and compliance obligations [3] [4] [2].
1. What changed: repeal and its scope
The legislature removed the exemption that treated bullion and monetized bullion as non-taxable, so from Jan. 1, 2026 that class of goods is treated as tangible personal property subject to retail sales tax and retailing B&O tax unless another specific exemption applies [1] [2] [4]. The Department of Revenue clarifies “precious metal bullion” includes smelted or refined metals whose value depends on content rather than form, and “monetized bullion” covers coins used as legal tender—definitions Congress and industry used to rely on for the prior 1985 exemption [5] [6].
2. Time-limited avoidance: buy before the law took effect
The most straightforward legal option that many used was accelerating purchases before the law’s effective date; purchases consummated before Jan. 1, 2026 remained governed by the old exemption and thus avoided sales and retailing B&O tax [3] [5]. Multiple industry sources and dealers publicly urged buyers to act before the deadline because the repeal was expected to add roughly 6.5% statewide sales tax plus local levies and dealer pass‑throughs from B&O impact [3] [7].
3. Wholesale/reseller routes and reseller permits
Washington still allows wholesale transactions to occur without retail sales tax when the buyer holds a valid reseller permit; in practice dealers can sell tax‑exempt to purchasers who intend resale, and such sales are subject to the wholesaling B&O rate rather than the retail rate [1] [4]. This legal channel requires proper documentation and an honest business purpose—buying bullion personally and claiming a reseller exemption without intent to resell would be noncompliant under Washington rules [4].
4. Out‑of‑state purchases, storage and shipping strategies
A common response among dealers and buyers is to buy in neighboring tax-favorable states or use out‑of‑state storage to avoid Washington sales tax; industry reporting cites cross‑border shopping to Oregon (no sales tax) or Idaho (which maintained exemptions) as anticipated behaviors that could blunt in‑state demand [8] [9]. While sources report customers and dealers discussing moving purchases or businesses out of state, the Department of Revenue guidance and ESSB 5794 language govern in‑state tax obligations and require careful attention to nexus and destination rules when shipping [9] [2]. The reporting does not lay out every legal step for using out‑of‑state storage without creating Washington tax liability, so specific outcomes depend on transaction facts and DOR interpretation [2].
5. Other classification nuances and political pushback
Not all precious-metal items are treated identically: numismatic or collectible coins and precious metal incorporated into manufactured items (jewelry, art) are subject to different tax treatment and may already have been taxable under prior rules, so structuring purchases around form can change tax exposure [10] [5]. The repeal provoked organized industry and advocacy responses—state coin associations and national “sound money” groups have filed or lobbied for restoration legislation and warned about business impacts—highlighting competing agendas: state revenue expansion versus protecting a niche industry and consumers from new transaction costs [11] [12].
Washington residents therefore have a short list of legal options to avoid state sales/use tax on precious metals—complete purchases before Jan. 1, 2026 (no longer available), acquire via bona fide wholesale/reseller channels with permits, purchase or store out of state where laws differ, or buy items that fall into other taxable classifications—but each path demands strict documentation, compliance with DOR rules, and awareness of political and market volatility that could shrink practical availability of those options [3] [4] [2]. Reporting limitations mean this summary does not replace tax counsel; the Department of Revenue notices and ESSB 5794 texts are the definitive authorities cited in the sources [2] [4].