LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 2812
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JUNE 24, 2024
SUMMARY
Synopsis: Exempts sales of investment metal bullion and investment coins from
sales and use tax.
Type of Impact: Annual State revenue loss.
Agency Affected: Department of the Treasury.
Office of Legislative Services Estimate
Type of Fiscal Impact Magnitude of Fiscal Impact
Annual State Revenue Loss Between $6.0 Million and $8.0 Million
 The Office of Legislative Services (OLS) estimates that the sales and use tax exemption of
investment metal bullion and investment coins would reduce State revenues by between $6.0
million and $8.0 million annually.
 The direct State revenue loss would be partially offset by any State revenue gain from indirect
fiscal effects that the creation of a sales and use tax exemption may generate. The OLS,
however, lacks the informational basis for quantifying any indirect State revenue gain from
potential changes in the behavior of economic actors.
BILL DESCRIPTION
This bill exempts from the sales and use tax the sale of investment metal bullion and investment
coins. The exemption would not apply to the sale of commemorative medallions or of jewelry or
works of art made of coins.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS expects the sales and use tax exemption of investment metal bullion and investment
coins to reduce State revenues by between $6.0 million and $8.0 million annually.
Absent publicly available State-level sales data for investment metal bullion and investment
coins, the OLS bases its estimate on nationwide sales by the United States Mint of gold, silver,
platinum, and palladium bullion coins from federal fiscal years 2019 to 2023.
The OLS recognizes that these data do not capture the resale of bullion coins on the secondary
market and therefore understate the size of the metal bullion market in the United States.
Nationwide metal bullion coin sales by the United States Mint averaged $2.7 billion from
federal fiscal years 2019 to 2023. The OLS
assumes that New Jersey metal bullion and coin
sales are proportionally the same as New
Jersey's share of the United States' total
personal income in calendar year 2022, or 3.3
percent, according to the federal Bureau of
Economic Analysis. Doing so results in $89.8
million in estimated annual metal bullion sales
in New Jersey. At the State’s 6.625 percent
sales tax rate, this yields an estimated $6.0 million in annual sales tax collections from the sale of
metal bullion, which would be forgone under the bill.
As the chart illustrates, however, the market is subject to significant volatility, which increases
the estimate’s margin of error. For that reason, and given that reported bullion coin sales in federal
fiscal years 2021 to 2023 were significantly higher than before, the OLS performed the same
calculation for the three-year nationwide sales average from federal fiscal years 2021 to 2023, or
$3.6 billion. The estimated amount of forgone revenue would be $8.0 million with the higher
nationwide sales figure.
To ascertain the reasonableness of the $6.0 million to $8.0 million estimate in light of the data
limitations, the OLS examined the revenue loss estimates of the sales and use tax exemption of
metal bullion coin sales in neighboring states
New Jersey Revenue
Loss Estimate, that publish estimates. To that end, the OLS
Revenue Loss Proportionalization researched other states’ annual tax
Estimate for FY 2022 Based on Population expenditure reports and then
Massachusetts $10,000,000 $13,262,440
Pennsylvania $8,100,000 $5,782,616 proportionalized the data to New Jersey
Maryland $3,200,000 $4,807,707 based on population. Excluding the revenue
New York $436,000,000 $205,239,423 loss estimate for the State of New York,
which appears to be significantly inflated by New York City’s unique position as a global financial
center, the OLS calculates that a proportionalized New Jersey estimate would range from $4.8
million to $13.3 million. This range aligns reasonably well with the OLS' initial estimate.
The OLS notes that the direct revenue loss would be partially offset by any indirect fiscal
effects that the creation of a sales and use tax exemption for investment metal bullion and
investment coin sales may generate. Examples of such potential indirect revenue gains include
additional trade shows, which would increase spending by attendees around the site of the trade
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shows. Or the repatriation of sales to New Jersey, irrespective of whether the New Jersey resident
purchaser currently complies with the legal obligation to pay the compensating use tax when sales
tax is not collected on the sale in another jurisdiction. If a sale were to newly occur in New Jersey
because of the exemption, then the business making the sale would have more taxable income and
could potentially grow. The OLS, however, lacks the informational basis for quantifying any
indirect State revenue gain from potential changes in the behavior of economic actors.
Section: Revenue, Finance and Appropriations
Analyst: Patrick Walsh
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).