How would a gold tax affect Washington state's economy?

1. What changed: law, timing and scope

The Washington Legislature passed ESSB/SB 5794 in 2025, which repealed the sales- and use-tax exemption that had previously excluded precious-metal bullion and monetized bullion from retail sales tax and from some B&O tax treatment; official Department of Revenue guidance says sales of bullion will be taxable as sales of tangible personal property effective Jan. 1, 2026 ^{[1] [2]}. The DOR language defines “precious metal bullion” and “monetized bullion” and ties the change to RCW and WAC revisions created by the bill ^{[1] [2]}.

2. Immediate price and business impacts cited by dealers

Coin and bullion dealers interviewed in local reporting say the sales-tax addition will directly raise the out‑of‑pocket cost for Washington buyers—industry figures and local outlets have illustrated the effect by applying Washington’s state rate and local add-ons to market prices of gold (examples in coverage cite ~$3,300/oz and an implied tax bite near $300 per ounce) and describe the new burden as “punishing” for retailers ^{[3] [4]}. Trade outlets and the National Coin & Bullion Association framed repeal as a setback for collectors and dealers and warned of negative impacts on the state’s numismatic market ^[5].

3. Competitive and cross-border effects — dealers’ and analysts’ perspectives

Dealers and advocacy groups say the tax creates a competitive incentive for buyers to purchase across state lines or online, reducing Washington sales and tourism revenue tied to conventions and in‑state dealers; industry commentaries argue states that keep bullion tax‑exempt (or newly exempt) become more attractive markets ^{[5] [6] [7]}. News segments quoted dealers recommending customers consider Oregon or Idaho to avoid the tax, a practical sign of potential cross‑border substitution ^[3].

4. Fiscal case: revenue vs. potential shrinkage of taxable base

State officials and lawmakers who supported repeal framed it as ending a “tax preference” and broadening the tax base; the Department of Revenue’s guidance treats bullion sales as taxable gross income for B&O and retail sales tax purposes, implying additional revenue collection ^{[1] [2]}. Opponents—including trade associations—argue that imposing sales tax on exchanges of money-like assets could reduce overall transactions and thereby reduce related economic activity and potentially limit the revenue gain, though available reporting does not provide state revenue projections to confirm net fiscal effects ^{[5] [7]}. Available sources do not mention official revenue estimates or cost–benefit calculations from the legislature.

5. Legal and policy framing: money vs. property

Advocates for bullion exemptions treat gold and silver as “sound money” or monetary instruments and argue taxing exchanges is akin to taxing money — a constitutional or policy objection aired by groups like Sound Money Defense League and industry commentators ^{[8] [7]}. The legislature’s action reverses decades of practice and instead treats bullion as taxable tangible personal property for sales-tax purposes, which the Department of Revenue now instructs businesses to collect ^[2].

6. Alternatives, exemptions, and national context

Other states are moving in different directions: some have expanded exemptions or created thresholds/venue-based exceptions, while Washington and Maryland moved toward broader taxation in 2025; industry pieces contrast Washington’s repeal with states that removed disincentives to bullion ownership, arguing this creates a patchwork of state approaches ^{[6] [7] [9]}. Available sources do not report on legislative efforts in Washington to add carve-outs, thresholds, or phase‑ins tied to this repeal.

7. What to watch next

Watch Department of Revenue guidance and implementation rules, local jurisdictions’ combined rates (state + local) that determine the exact consumer tax burden, and any dealer responses such as relocating point-of-sale, changing shipping practices, or legal challenges from industry groups; current DOR notices and industry reporting are already tracking the effective dates and compliance requirements ^{[1] [2] [3]}. Also monitor whether the state publishes revenue impacts or whether trade groups successfully lobby for amendments—available reporting does not yet show post‑enactment revenue outcomes ^{[5] [7]}.

Limitations: This analysis uses official DOR notices and contemporary industry and local reporting; available sources do not include detailed state fiscal impact analyses or post‑implementation sales data to confirm long‑term economic effects ^{[1] [2] [5]}.