How do Washington exemptions distinguish bullion valued for metal content versus numismatic/collectible coins for sales‑tax purposes?
Executive summary
bullion-sales">Washington historically treated “precious metal bullion” differently from numismatic or collectible coins for sales-tax purposes by exempting bullion whose value rests on metal content and coins used as legal tender, while taxing items valued for rarity, design, or use in manufacturing; that line has been defined in state rules as value‑depends‑on‑content versus value‑depends‑on‑form or collectibility [1] [2]. The Legislature repealed those exemptions effective January 1, 2026, changing how the distinctions operate in practice and prompting industry pushback [3] [1] [4].
1. Legal definitions that drew the dividing line
Washington’s guidance defined “precious metal bullion” as metal that has been smelted or refined and is “in such state or condition that its value depends upon its contents and not upon its form,” and defined “monetized bullion” as coins or money manufactured from metal that have been used as a medium of exchange—specifically excluding coins sold to be manufactured into jewelry or works of art [1] [2].
2. How that legal test worked in everyday transactions
Under the prior framework, dealers and the Department applied a content‑vs‑form test: bars, cast or minted rounds and widely recognized bullion coins whose market price aligns with metal spot value were treated as exempt bullion, while items sold for premiums tied to rarity, grading, or collectibility were treated as taxable tangible personal property subject to retail sales tax and B&O tax when sold at retail [5] [2] [6].
3. Where numismatic and collectible coins fit—and why they differed
Numismatic or commemorative coins and other collectibles were taxable because their value derived from scarcity, historical importance, or condition rather than intrinsic metal content; Washington’s rules and industry guides explicitly distinguish “numismatic coins” and “collectible precious metal items” as being subject to sales tax even when made of gold or silver [5] [7].
4. Practical boundary issues and common exceptions
Washington’s guidance carved out clear exceptions that mattered in practice: sales of bullion intended to be manufactured into jewelry or works of art were taxable, and paper currency sold other than as legal tender counted as taxable tangible personal property; sellers taking resale or manufacturing statements could affect tax treatment in those edge cases [1] [2] [6].
5. The 2025–2026 policy shift that changed the playing field
Legislation enacted in 2025 (effective Jan. 1, 2026) repealed the longstanding exemptions so that gross income from sales of precious metal bullion and monetized bullion are now taxable as retail sales of tangible personal property—meaning Washington now treats bullion and monetized bullion like other retail goods for both retail sales tax and B&O tax purposes [3] [1] [6].
6. Stakes, reactions and implicit agendas behind the distinction
The old exemption was defended by numismatic and bullion trade groups as supporting local dealers and collectors, while state evaluators and lawmakers framed repeal as revenue generation and alignment of tax policy with tangible‑property treatment—JLARC recommended legislative review and the Legislature estimated substantial revenue from the change, prompting industry warnings about lost competitiveness and event traffic [8] [4] [9] [3].
7. Bottom line for how the distinction operated and what changed
Prior to 2026, the tax distinction hinged on whether an item’s price reflected metal content (exempt bullion) or collectible/functional attributes (taxable numismatics or manufactured items), with specific rules for monetized bullion and manufacturing uses; after the 2025 law, those exemptions were repealed and most bullion and monetized bullion sales at retail are taxable, leaving only narrow exemptions (e.g., legal‑tender currency exchanges) that the Department’s guidance continues to explicate [1] [6] [3].