What tax rules apply to private sales of precious metals in Washington state?
Executive summary
Washington has changed long-standing practice: the state repealed the sales-tax exemption for precious metal bullion and monetized bullion in 2025, and beginning Jan. 1, 2026 those private sales will be treated as taxable tangible personal property subject to retail sales tax and retailing B&O tax (Washington Department of Revenue guidance and reporting on ESSB 5794) [1][2]. Industry and advocacy outlets report the law was signed in mid‑2025 after legislative debate; opponents say the change harms local dealers, while state analyses cited by lawmakers argued the exemption did not meet its policy goals [3][4].
1. What the law now says — taxable status and effective date
Beginning January 1, 2026, sales of precious metal bullion (refined/processed metals valued for content) and monetized bullion (coins used as legal tender) are no longer excluded from the statutory definitions of wholesale and retail sale; Washington will tax those sales as tangible personal property and impose retail sales tax and retailing B&O tax where applicable (Washington Department of Revenue guidance summarizing ESSB 5794 and WAC 458‑20‑248) [1][2].
2. What types of transactions are affected
The change covers bullion defined as smelted or refined precious metals whose value depends on content (gold, silver, platinum, palladium, rhodium) and monetized bullion (government‑recognized coins); paper currency sold as legal tender remains exempt but sales of coins that cannot be used as money can trigger retailing B&O and sales tax (DOR industry guidance) [2][5].
3. How tax collection and B&O interplay
When gross income from bullion sales is subject to retailing B&O tax, the same transactions are subject to retail sales tax; commissions on bullion and monetized bullion sales may be reported under service and other activities B&O tax (DOR publications explaining tax computation and commission treatment) [2].
4. Practical tax rate impact and local variation
Multiple industry summaries note Washington’s base state sales tax (commonly cited at 6.5%) plus local rates can push the total tax rate materially higher in many localities, so the effective consumer cost on a purchase can vary by ZIP code and retailer location (industry analyses and dealer advisories) [6][7]. The Department of Revenue directs sellers to begin charging appropriate retail sales tax starting the effective date [1].
5. Pre‑2025 exemption and reason for repeal
Washington had exempted qualifying bullion sales since 1985 under WAC 458‑20‑248 and RCW 82.04.062; lawmakers and the Joint Legislative Audit and Review Committee (JLARC) reviewed that preference and concluded it might not achieve its inferred policy goal of helping in‑state dealers compete, prompting repeal language in ESSB 5794 (DOR materials and industry reporting summarizing legislative rationale) [2][3].
6. Industry response and conflicting timelines in press
Numismatic and bullion trade groups loudly opposed repeal, warning of harm to collectors and dealers; some trade outlets and advocacy sites reported different effective dates (October 1, 2025 vs. Jan. 1, 2026) and echoed industry objections—state publications and most official summaries, however, consistently cite Jan. 1, 2026 as the effective date [4][1][2]. Reporters and industry pages differ on transitional details; follow DOR guidance for compliance [1].
7. Where ambiguity remains and what to watch
Available sources do not mention specific guidance on dealer recordkeeping thresholds for private person‑to‑person sales, special exemptions for certain collectible coins, or whether resale exemption mechanics (e.g., resale certificates) will change in practice; the Department of Revenue pages and ESSB 5794 summaries are primary authorities for those operational details [1][5]. Dealers should consult DOR updates and industry trade groups for administrative rules, and buyers should expect to be charged state and applicable local sales tax starting Jan. 1, 2026 [1][6].
8. Bottom line for private sellers and buyers
If you buy or sell precious metal bullion or monetized bullion in Washington after Jan. 1, 2026, expect the transaction to be treated as a taxable retail sale with retail sales tax and retailing B&O implications for sellers; prior exemptions that made bullion effectively tax‑free have been repealed by 2025 legislation summarized by the Washington Department of Revenue [1][2]. Consider confirming the exact tax rate with the seller or the DOR for your locality and seek professional tax advice for capital‑gains or federal tax questions, which are outside the scope of these state sources [2][3].