Bullion buyers of the world, unite!
That might be the rallying cry of gold and silver investors when they hear that their online purchases will be subjected to state sales taxes.
The Wall Street Journal reported Monday that the political consensus that had managed to keep the Internet a sales tax free method of purchase for many years is breaking down and state governors are now scrambling to tap another source of tax revenue.
This would require congressional action to mandate that online merchants collect the taxes, but Tennessee Sen. Lamar Alexander is quoted as saying that this will happen this year or next.
But before you think bullion buyers are being singled out, the mandate to collect state sales taxes would apply to all online goods, including coins. However, the thin margins on which many bullion firms work will be jeopardized.
The language of previous proposals have called for online merchants to collect the taxes levied by the state where the purchaser is.
Many states currently exempt certain coin and bullion purchases from state sales taxes so bullion buyers from those states wouldn’t be affected – yet.
But how long might these exemptions survive, especially if Congress decides that a uniform national rate would simplify the collecting burden being placed on the shoulder’s of online merchants?
Now bullion investors can ad tax policy to their worries about fiat money, quantitative easing and potential government confiscations.
Buzz blogger Dave Harper is editor of the weekly newspaper “Numismatic News.”