The Governor of Arizona Doug Ducey has signed into law a bill which removes all state income tax on precious metals coins. The measure was passed in the Arizona Senate on May 10 by a margin of 16-13.
When people buy gold or silver to protect themselves against the devaluation of America’s paper currency, they frequently end up with a “gain” when exchanging the metal back into dollars.
However, this is not necessarily a real gain, regarding purchasing power. This “gain” is often nominal because of the slow but steady devaluation of the dollar. The government nevertheless assesses it as a gain for tax purposes.
The bill, called House Bill 2014, was introduced by Republican Mark Finchem who insisted that taxing exchanges of “legal tender” like gold coins is a tax on money.
“As transmitted the bill provides for the tax-neutral treatment of a very limited class of collectibles, using narrowly defined language,” Ducey said in a written statement. He and his predecessor Jan Brewer have vetoed three similar bills.