Do Washington private sellers have to report income from selling gold or silver on state tax returns?
Executive summary
Washington does not levy a general personal income tax [1], so there is no routine “state income tax return” on which most residents would report capital gains from selling gold or silver; however, state tax rules for bullion changed effective January 1, 2026 and create new obligations for sellers who are engaged in retail activity (sales tax and B&O tax) and for consumers who use bullion without having paid sales tax (use tax) [2] [3] [4].
1. What the law changed on January 1, 2026 — retail and B&O tax now apply
Legislation and Department of Revenue guidance repeal the long-standing exemption for “precious metal bullion” and “monetized bullion,” so gross income from retail sales of bullion is now taxable as the sale of tangible personal property: sellers who retail bullion must collect retail sales tax and remit B&O tax under the Retailing classification starting Jan. 1, 2026 [2] [3] [5].
2. Distinguishing business sellers from private, occasional sellers
The new rules target sales that constitute retailing or wholesaling: businesses that sell bullion as inventory will be required to register, collect sales tax, and pay B&O tax on gross receipts [2] [5]. The Department of Revenue and tax commentators emphasize that wholesale transactions to buyers with valid reseller permits remain treated differently (wholesaling B&O rate) [2] [5]. WAC language from the 1980s previously exempted such sales [4], but the statutory framework was changed by recent legislation [6].
3. What private sellers should watch for — use tax and “first use” rules
For private individuals who sell personal bullion holdings, the DOR’s existing doctrine about use tax and the “first use” by a consumer matters: if retail sales tax was not paid on a purchase and the bullion is first used in Washington in a way that would have been taxable, the use tax can apply [4] [7]. Industry-facing FAQs flag that Use Tax generally applies when sales tax was not paid at purchase or was paid at a lower rate and can apply regardless of whether a purchase was made in person, online, or through a private seller [7].
4. Reporting “income” to the state — the tricky answer
Because Washington has no broad personal income tax, ordinary capital gain realized by a resident on sale of personal property is not reported on a Washington income tax return in the way it would be on a federal return; multiple guides note Washington’s lack of a general income tax even as they describe the new sales/B&O framework [1]. That said, some sources indicate Washington does tax certain capital gains transactions in specific circumstances [8]; the available reporting here does not fully reconcile whether and how bullion capital gains are separately captured by any existing state capital‑gains provisions beyond sales/use and B&O tax obligations [8]. Further, federal tax rules still require reporting capital gains on federal returns [9], which remains the primary reporting obligation for gains on precious metals.
5. Conflicting guidance and practical implications
Industry and historical WAC citations still circulate claiming long-standing exemptions for qualifying bullion [10] [4], which created confusion; the Department of Revenue’s special notices and multiple news and trade publications uniformly report that the exemption was repealed and that retail sales of bullion are taxable beginning 2026 [2] [3] [6] [11]. The practical takeaway is that casual sellers who are not in the business of selling bullion should evaluate whether their activity rises to “retailing” (triggering collection/ B&O obligations) and whether use tax could apply; businesses that sell bullion must collect and remit under the new rules [2] [5] [7].
6. Limits of available reporting and recommended next steps for taxpayers
The sources provided establish the sales tax and B&O change [2] [3] [5] and note Washington’s historic absence of a general income tax [1], but they do not offer a definitive, source‑documented protocol for every fact pattern of a private sale (occasional person-to-person sale, estate sale, dealer buyback, interstate seller, or online marketplace). Taxpayers with non‑trivial transactions should consult the Department of Revenue guidance and, if necessary, a tax professional to determine whether a private sale is a taxable “retail” event, whether use tax applies, and how federal capital‑gains reporting interacts with Washington’s rules [2] [3] [4].