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Are private sales of gold between individuals taxable in Washington state?
Executive Summary
Private sales of gold between individuals in Washington state have generally been treated as exempt from state retail sales tax up to December 31, 2025, but that exemption is scheduled to end and the state will apply retail sales tax and B&O taxes to sales of precious metal bullion starting January 1, 2026; state-level capital gains treatment is a separate issue and may apply to gains rather than sales tax [1] [2]. The available materials do not definitively state that casual peer-to-peer gold transactions were taxed before 2026, and they show legal changes and ambiguous guidance about how private sales will be treated going forward, so sellers should expect new tax obligations after the statutory change and seek tailored advice [3] [4].
1. Why the tax landscape for gold just changed — and what that means for private sellers
Washington historically excluded many forms of precious metal bullion from retail sales and B&O tax, creating an environment where sales of refined bullion and certain coins were generally tax-exempt, which implicitly covered many private transfers of bullion between individuals, though guidance was not always explicit about casual peer-to-peer sales [1]. Legislative action passed in 2025 alters that framework: effective January 1, 2026, sales of precious metal bullion will be subject to retail sales tax and the business and occupation tax in Washington, a rule the Department of Revenue announced in a September 24, 2025 notice; this statutory change converts prior exemptions into taxable transactions for sales occurring on or after that date [2] [3]. That shift is significant because it expands tax exposure from commercial dealers to broader sales of bullion, although the practical application to individual-to-individual transactions depends on statutory definitions and administrative rules that distinguish end-consumer purchases from wholesaling or reselling activities [2].
2. What the official notices and guides actually say — read the fine print
State notices and consumer guides assembled in 2025 consistently report that the exemption for precious metal bullion expires at the end of 2025, but they stop short of a clean statement explicitly listing every form of private sale as taxable or nontaxable prior to that expiration [1] [5]. The Department of Revenue materials referenced RCW sections and administrative rules and indicated that sales to end consumers will be subject to retail sales tax and B&O tax after January 1, 2026, while sales to resellers may fall under wholesaling B&O classifications — language that implies wholesale vs. retail distinctions will matter in determining tax exposure for private sellers [2]. The takeaway: the administrative guidance anchors the legislative change but leaves operational nuances for future rulemaking and taxpayer interactions, so the legal text and later DOR guidance will determine how everyday private sales are assessed.
3. Capital gains vs. sales tax — two separate tax axes that both matter
Federal tax law treats gains on sales of precious metals as collectible property for capital gains purposes, making sellers potentially subject to federal capital gains tax on profits; Washington enacted a capital gains tax in 2022 but exempted certain classes of property including physical precious metal bullion from that state capital gains levy, creating a layered position where sales tax and capital gains tax operate under distinct rules and exemptions [4] [6]. The sources indicate Washington’s capital gains regime does not straightforwardly capture sales of physical bullion, while the upcoming sales tax/B&O change specifically targets the sale transaction itself rather than capital gain calculations [4]. Sellers therefore face two different questions: whether the sale triggers a retail sales tax/B&O liability as of 2026, and separately whether any profit triggers federal or state-level capital gains tax under the applicable exclusions.
4. What the analyses disagree on — and where ambiguity remains
The collected analyses agree on the central fact of a legislative change rendering bullion sales taxable beginning in 2026, but they diverge on how clearly private person-to-person sales were treated before the change and exactly how administrative rules will apply to casual transactions between individuals [3] [5] [7]. Some summaries describe pre-2026 transactions as generally exempt and imply private sales were likely non-taxable in practice, while others caution that statutory and regulatory language left exceptions and nuances that could have captured specific transactions even before the statutory expiration [5] [7]. The evidence shows clear forward motion toward taxation but not complete resolution of operational edges: resale classification, dealer thresholds, and documentation requirements could materially affect whether a private seller must collect or remit tax under particular facts [2].
5. Practical next steps for buyers and sellers facing the change
Given the statutory change effective January 1, 2026, individuals planning to buy or sell gold should anticipate retail sales tax and possible B&O obligations on transactions involving refined bullion and qualifying coins after that date, and preserve transaction records to determine whether an exchange was a casual private sale or a business activity subject to tax classifications. The material recommends consulting the specific RCW sections and Washington Department of Revenue guidance referenced in the notices, and seeking professional tax advice to resolve capital gains implications and the interplay of sales tax/B&O requirements for particular transactions [2] [6]. Documenting price, form of metal, and intent to resell will be crucial in the near-term as administrative guidance and enforcement practices crystallize.