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The way you've written it sounds like taxing unmonetized bullion is insane overreach, but is it? They're just treating them the same as any other commodities. I

The way you've written it sounds like taxing unmonetized bullion is insane overreach, but is it? They're just treating them the same as any other commodities. I can understand if you're opposed to sales taxes generally, but the only reason to single out bullion for an exception I can see is historic norms. They're also applying a tax to monetized bullion. That's more more like taxing currency exchanges and it's a bit weird since currency exchanges are normally taxed on appreciation.

nerdsniper 9mo ago
We do not charge sales tax when you exchange Dollars for Euros. Bullion advocates argue that exchanging dollars for physical gold is a currency exchange rather than a consumption purchase. If you were to turn that bullion into an actual product like jewelry, then it would be taxed. When a firm with tank capacity takes delivery of an oil contract they secured via the CBRE, do they pay sales tax on that? No, because it’s intended for resale. Unmonetized gold bullion is similarly generally intended for resale. Generally no one is “consuming” gold bullion.
- AlotOfReading 9mo ago
  Currency exchanges are exactly why I differentiated between monetized and unmonetized bullion. I don't see why going to Costco and buying a bar of gold is fundamentally different than buying the same weight of gold jewelry. That jewelry may very well be intended for resale the same way.
  - nerdsniper 9mo ago
    Whereas to me, it's wild that thousands of years of gold bullion trade as a form of currency exchange is supplanted basically overnight and now only "gold but only on paper" would be considered the only form of real gold currency. "Monetized" gold has only existed for 50 years since gold futures started being offered in 1972. But the real "retail era" of "gold but only on paper" started just ~20 years ago with gold ETF's in 2003 (Australia) and 2004 (USA). So in just 20 years, we're now arguing that the norm from the past 3,000 years of gold trade is completely invalidated. That said, you're not completely out of line with the views of the USA federal government. Gold has fascinating history of regulation. There was the 1933 total ban on private ownership when U.S. citizens were given until May 1, 1933, to surrender all gold coins and bullion. That lasted until 1974. Or that gold bullion is not subject to FinCEN Form 105 (currency) but rather CBP Form 6059B (goods).
    - AlotOfReading 9mo ago
      Much of the 3,000 years of history you're referring to saw precious metals used as wealth storage primarily in the form of objects like jewelry, silverware, and candlesticks. All of which have sales taxes. The question I'm asking is why it's unreasonable that bullion that we've agreed isn't currency isn't being treated differently than these other things?
      - AnthonyMouse 9mo ago
        A fork is a finished consumer product. Even if it's made of silver, you can use it to eat with. Bullion isn't a finished consumer product, it's the packaging format for the raw material. Sales tax applies to finished consumer products. The intermediary stages are traditionally exempt, i.e. the person who buys bullion in order to make silver forks doesn't pay sales tax, the person who buys the fork does.
        AlotOfReading 9mo ago
        Craft stores still add sales tax to raw material. Costco charges sales taxes to business accounts, unless given a certificate of resale or buying from an exempt category in whatever state. I could go on, but clearly sales taxes apply to more than "just" finished consumer products. They apply pretty broadly to retail sales as a whole. It's at least a distinction though, unlike the other arguments.
      - thrawa8387336 9mo ago
        Sales taxes is a much more modern invention not 3000. Gold was money and still is in freer jurisdictions
    - thaumasiotes 9mo ago
      > Whereas to me, it's wild that thousands of years of gold bullion trade as a form of currency exchange is supplanted basically overnight and now only "gold but only on paper" would be considered the only form of real gold currency. I mean, it's not a coincidence. For example, the US government has laws against using gold as currency, and they take those laws seriously and enforce them with vigor. They don't want dollars to suffer the competition. Given the laws, it is necessarily the case, by definition, that gold is not currency.
  - thaumasiotes 9mo ago
    > That jewelry may very well be intended for resale the same way. It isn't. There is a widespread belief that jewelry is a durable investment, that if you fall on hard times you will be able to sell the jewelry for an amount similar to what you paid for it, or more. It's fair to say that many people have this idea in mind when they buy jewelry, and that it pushes up the price. But it isn't true; if you resell your jewelry you're going to get basically nothing compared to what you paid, unless you like to wear gold chains. The resale value of new jewelry is more like the resale value of a new car. If there was any significant demand to resell jewelry, everyone would know this. The fact that they don't is sufficient to demonstrate that they have no intention of actually reselling.
    - ahtihn 9mo ago
      > But it isn't true; if you resell your jewelry you're going to get basically nothing compared to what you paid, unless you like to wear gold chains. The resale value of new jewelry is more like the resale value of a new car. This entirely depends on the type of jewellery and the premium you pay for it over the price of raw materials. I know for a fact that there's quite a lot of jewelry that trades at a fairly tight spread around the price of weight in gold (10-20% between bid and ask). Losing 20% isn't getting "basically nothing" Of course, if there's a brand name involved you're not really paying for just the gold content anymore so there the resale value sucks.
    - AlotOfReading 9mo ago
      You can sell jewelry for the same price as the equivalent weight in whatever purity of precious metals it is and I specified same weight in the parent comment. They won't be the same price originally, but that's not particularly germane to this discussion of whether there should be a sales tax on one vs the other. And for what it's worth, people buy things for different reasons. It's very common for Indians to explicitly value jewelry as a wealth store (among other reasons), to give one example.
      - thaumasiotes 9mo ago
        > You can sell jewelry for the same price as the equivalent weight in whatever purity of precious metals it is and I specified same weight in the parent comment. Yes, of course. Didn't you see my aside? >> unless you like to wear gold chains But you can't buy jewelry for the price of the precious metal content. You get charged for the jewels too, and they have very limited resale value.
- bwestergard 9mo ago
  "Generally no one is “consuming” gold bullion." Huh? Gold bullion is an input to hundreds of industrial processes. If it weren't, why would gold have any value?
  - nerdsniper 9mo ago
    That's not consumption as it applies to sales tax rules. In almost every jurisdiction, raw materials and inventory purchased for resale or industrial processing are exempt from sales tax.
    - deleted 9mo ago
      [deleted]
    - Ekaros 9mo ago
      Which is why Value added tax is superior system. Though gold is in some jurisdictions treated different when it is considered investment. But for rest it is like any other metal.
  - ta9000 9mo ago
    Why would gold, something that’s had value for thousands of years prior to the Industrial Revolution, have any value?
    - nitwit005 9mo ago
      Even in ancient times it was consumed to make jewelry and decorations. People used to go to the goldsmiths to sell their gold.
      - ta9000 9mo ago
        Sorry I clearly should have added a /s.
    - irishcoffee 9mo ago
      Wouldn’t that be for the same kinds of reasons things like purple dyes were valuable: rare to find, hard to harvest, hard to transmogrify (insect/sea life guts into clothing dye, gold into chains or other wearables), hard to break, which all culminates into a quick visual indication of wealth. Now? Gold is a great conductor of electricity (of course silver is better) and some people still like wearing lots of flashy jewelry. I have no earthly clue why people find it valuable to invest in other than it’s like bitcoin: it’s valuable because everyone else also thinks it’s valuable. Never once have I read a quarterly progress report from the CEO of the element “gold” outlining profit strategies for the next year.
- deleted 9mo ago
  [deleted]
- kristjansson 9mo ago
  > Bullion advocates argue that exchanging dollars for physical gold is a currency exchange rather than a consumption purchase. One can argue that until they're blue, but it'd still be wrong. Gold is a commodity, and if you're buying it shell-packed at Costco you probably should be paying sales tax on it.
outside1234 9mo ago
Washington State will do anything to avoid just having an income tax.
- WalterBright 9mo ago
  They already have a draft income tax proposal, and are eager to pass it.

nerdsniper 9mo ago

We do not charge sales tax when you exchange Dollars for Euros. Bullion advocates argue that exchanging dollars for physical gold is a currency exchange rather than a consumption purchase. If you were to turn that bullion into an actual product like jewelry, then it would be taxed. When a firm with tank capacity takes delivery of an oil contract they secured via the CBRE, do they pay sales tax on that? No, because it’s intended for resale. Unmonetized gold bullion is similarly generally intended for resale. Generally no one is “consuming” gold bullion.

AlotOfReading 9mo ago
Currency exchanges are exactly why I differentiated between monetized and unmonetized bullion. I don't see why going to Costco and buying a bar of gold is fundamentally different than buying the same weight of gold jewelry. That jewelry may very well be intended for resale the same way.
- nerdsniper 9mo ago
  Whereas to me, it's wild that thousands of years of gold bullion trade as a form of currency exchange is supplanted basically overnight and now only "gold but only on paper" would be considered the only form of real gold currency. "Monetized" gold has only existed for 50 years since gold futures started being offered in 1972. But the real "retail era" of "gold but only on paper" started just ~20 years ago with gold ETF's in 2003 (Australia) and 2004 (USA). So in just 20 years, we're now arguing that the norm from the past 3,000 years of gold trade is completely invalidated. That said, you're not completely out of line with the views of the USA federal government. Gold has fascinating history of regulation. There was the 1933 total ban on private ownership when U.S. citizens were given until May 1, 1933, to surrender all gold coins and bullion. That lasted until 1974. Or that gold bullion is not subject to FinCEN Form 105 (currency) but rather CBP Form 6059B (goods).
  - AlotOfReading 9mo ago
    Much of the 3,000 years of history you're referring to saw precious metals used as wealth storage primarily in the form of objects like jewelry, silverware, and candlesticks. All of which have sales taxes. The question I'm asking is why it's unreasonable that bullion that we've agreed isn't currency isn't being treated differently than these other things?
    - AnthonyMouse 9mo ago
      A fork is a finished consumer product. Even if it's made of silver, you can use it to eat with. Bullion isn't a finished consumer product, it's the packaging format for the raw material. Sales tax applies to finished consumer products. The intermediary stages are traditionally exempt, i.e. the person who buys bullion in order to make silver forks doesn't pay sales tax, the person who buys the fork does.
      - AlotOfReading 9mo ago
        Craft stores still add sales tax to raw material. Costco charges sales taxes to business accounts, unless given a certificate of resale or buying from an exempt category in whatever state. I could go on, but clearly sales taxes apply to more than "just" finished consumer products. They apply pretty broadly to retail sales as a whole. It's at least a distinction though, unlike the other arguments.
    - thrawa8387336 9mo ago
      Sales taxes is a much more modern invention not 3000. Gold was money and still is in freer jurisdictions
  - thaumasiotes 9mo ago
    > Whereas to me, it's wild that thousands of years of gold bullion trade as a form of currency exchange is supplanted basically overnight and now only "gold but only on paper" would be considered the only form of real gold currency. I mean, it's not a coincidence. For example, the US government has laws against using gold as currency, and they take those laws seriously and enforce them with vigor. They don't want dollars to suffer the competition. Given the laws, it is necessarily the case, by definition, that gold is not currency.
- thaumasiotes 9mo ago
  > That jewelry may very well be intended for resale the same way. It isn't. There is a widespread belief that jewelry is a durable investment, that if you fall on hard times you will be able to sell the jewelry for an amount similar to what you paid for it, or more. It's fair to say that many people have this idea in mind when they buy jewelry, and that it pushes up the price. But it isn't true; if you resell your jewelry you're going to get basically nothing compared to what you paid, unless you like to wear gold chains. The resale value of new jewelry is more like the resale value of a new car. If there was any significant demand to resell jewelry, everyone would know this. The fact that they don't is sufficient to demonstrate that they have no intention of actually reselling.
  - ahtihn 9mo ago
    > But it isn't true; if you resell your jewelry you're going to get basically nothing compared to what you paid, unless you like to wear gold chains. The resale value of new jewelry is more like the resale value of a new car. This entirely depends on the type of jewellery and the premium you pay for it over the price of raw materials. I know for a fact that there's quite a lot of jewelry that trades at a fairly tight spread around the price of weight in gold (10-20% between bid and ask). Losing 20% isn't getting "basically nothing" Of course, if there's a brand name involved you're not really paying for just the gold content anymore so there the resale value sucks.
  - AlotOfReading 9mo ago
    You can sell jewelry for the same price as the equivalent weight in whatever purity of precious metals it is and I specified same weight in the parent comment. They won't be the same price originally, but that's not particularly germane to this discussion of whether there should be a sales tax on one vs the other. And for what it's worth, people buy things for different reasons. It's very common for Indians to explicitly value jewelry as a wealth store (among other reasons), to give one example.
    - thaumasiotes 9mo ago
      > You can sell jewelry for the same price as the equivalent weight in whatever purity of precious metals it is and I specified same weight in the parent comment. Yes, of course. Didn't you see my aside? >> unless you like to wear gold chains But you can't buy jewelry for the price of the precious metal content. You get charged for the jewels too, and they have very limited resale value.
bwestergard 9mo ago
"Generally no one is “consuming” gold bullion." Huh? Gold bullion is an input to hundreds of industrial processes. If it weren't, why would gold have any value?
- nerdsniper 9mo ago
  That's not consumption as it applies to sales tax rules. In almost every jurisdiction, raw materials and inventory purchased for resale or industrial processing are exempt from sales tax.
  - deleted 9mo ago
    [deleted]
  - Ekaros 9mo ago
    Which is why Value added tax is superior system. Though gold is in some jurisdictions treated different when it is considered investment. But for rest it is like any other metal.
- ta9000 9mo ago
  Why would gold, something that’s had value for thousands of years prior to the Industrial Revolution, have any value?
  - nitwit005 9mo ago
    Even in ancient times it was consumed to make jewelry and decorations. People used to go to the goldsmiths to sell their gold.
    - ta9000 9mo ago
      Sorry I clearly should have added a /s.
  - irishcoffee 9mo ago
    Wouldn’t that be for the same kinds of reasons things like purple dyes were valuable: rare to find, hard to harvest, hard to transmogrify (insect/sea life guts into clothing dye, gold into chains or other wearables), hard to break, which all culminates into a quick visual indication of wealth. Now? Gold is a great conductor of electricity (of course silver is better) and some people still like wearing lots of flashy jewelry. I have no earthly clue why people find it valuable to invest in other than it’s like bitcoin: it’s valuable because everyone else also thinks it’s valuable. Never once have I read a quarterly progress report from the CEO of the element “gold” outlining profit strategies for the next year.
deleted 9mo ago
[deleted]
kristjansson 9mo ago
> Bullion advocates argue that exchanging dollars for physical gold is a currency exchange rather than a consumption purchase. One can argue that until they're blue, but it'd still be wrong. Gold is a commodity, and if you're buying it shell-packed at Costco you probably should be paying sales tax on it.

outside1234 9mo ago

Washington State will do anything to avoid just having an income tax.

WalterBright 9mo ago
They already have a draft income tax proposal, and are eager to pass it.