How would a gold tax be enforced in Washington state?

1. Law change bites: How the state redefined bullion and taxability

Washington’s 2025 legislative action reclassified precious metal bullion and monetized bullion so that gross income from their sales is taxable as sales of tangible personal property beginning January 1, 2026, overturning a long-standing practical exemption and bringing bullion into the Retailing or Wholesaling B&O tax system depending on the buyer and transaction ^[2]. The statutory text and legislative summaries emphasize that bullion is defined by its processed, smelted, or refined state and valued on metal content rather than form, so bars, rounds, and similar items are captured; monetized bullion such as government-issued coins used as currency is also included, narrowing previous carve-outs and expanding the universe of taxable transactions for state auditors to monitor ^[3]. This redefinition creates a bright-line test for tax administrators and reduces ambiguity over whether a particular item is taxable based on presentation.

2. Collection mechanics: Who must collect and what they file

Under the new framework, retail sellers of bullion who sell to end consumers must collect retail sales tax at the point of sale and report those receipts under the Retailing classification of the B&O tax, establishing the same collection responsibility that applies to other tangible goods retailers; conversely, sales where a valid reseller permit is presented are treated as wholesaling transactions subject to the Wholesaling B&O classification and exempt from retail sales tax collection ^[2]. The law clarifies that commissions from bullion transactions are taxable under service and other activities B&O tax, which means brokers and agents must separately account for fee income and remit appropriate taxes, creating multiple filing lines and audit trails for Department of Revenue enforcement efforts to follow ^[3]. The statutory alignment with existing retail and wholesale tax mechanics enables immediate operational enforcement by leveraging well-established compliance channels.

3. Enforcement tools: Audits, reporting, and nexus with online marketplaces

Washington’s enforcement will rely on the Department of Revenue’s existing audit and reporting infrastructure, using sales tax collection at point of sale, B&O return filings, and reseller permit verification to identify noncompliance; the law’s explicit tax classifications create taxable events and documentation requirements that auditors can trace through purchase records and online sales platforms ^[2]. The legislative change anticipates cross-border and online avoidance risks by treating gross receipts from bullion sales as taxable and by tying obligations to sellers regardless of bullion form, which strengthens legal footing for the state to pursue in-state dealers and remote sellers with sufficient nexus. This enables routine audits and targeted investigations, but enforcement effectiveness will depend on the state’s capacity to monitor remote and cross-border transactions and on cooperation from marketplaces and financial intermediaries ^{[4] [2]}.

4. Business and industry reaction: Compliance fear and avoidance incentives

Dealers and industry representatives argue the tax will push customers to out-of-state or online sellers and potentially risk fraudulent purchases, with CFOs of local firms warning of competitiveness harms and immediate attempts to accelerate sales before the tax effective date; these stakeholders emphasize a perceived 10% upfront cost to consumers and caution that buyers may seek jurisdictions without the tax or less-regulated online vendors ^{[1] [5]}. The legislative side frames the move as fiscal necessity amidst a multi-billion-dollar state budget shortfall and as closing a loophole where bullion sales had been effectively untaxed, while critics stress enforcement challenges and potential unintended consequences for local businesses and consumer protection. Both perspectives point to trade-offs between revenue collection and market behavior shifts that state officials will need to monitor post-implementation ^{[5] [4]}.

5. What to watch next: Practical gaps and policymaker choices

Key implementation issues that will determine enforcement success include how the Department of Revenue defines valuation rules for content-based pricing, how reseller permit validation is operationalized for physical and online sellers, and whether the state expands audit resources to cover bullion trade and online marketplaces; these operational clarifications and resource allocations will shape whether the statutory change translates into effective tax collection or merely shifts commerce out of state ^[3]. Lawmakers and administrators must also weigh consumer protection needs highlighted by dealers worried about counterfeit risks if buyers go to less-regulated sellers, which could prompt complementary policies on marketplace verification or information campaigns. Monitoring post-2026 sales patterns, audit results, and retailer compliance rates will reveal whether the law meets revenue goals without triggering substantial avoidance or consumer harm ^{[1] [3]}.