BILL NUMBER: S7875
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the tax law, in relation to the sales and use tax
exemption for certain transactions in precious metal bullion held for
investment purposes
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill would end the tax-free sale of precious metal bullion sold for
investment for over $1,000
 
SUMMARY OF PROVISIONS:
Section one of the bill amends paragraph 27 of subdivision (a) of
section 1115 to eliminate the exemption of sales tax to precious metal
bullion sold for investment except for sales that occur between central
banks and other governmental institutions
Section two of the bill provides for the effective date
 
JUSTIFICATION:
New York currently exempts precious metal bullion and coins sold for
more than $1,000 from sales tax, defining "precious metal bullion" in
Tax Law § 1115(a)(27) to mean bars, ingots, or coins of gold, silver,
platinum, palladium, rhodium, ruthenium, or iridium. While some inves-
tors purchase bullion coins as gifts or collectible items, others choose
to invest in them for their perceived value as a means of maintaining
purchasing power against inflation.
While taxpayers do have to remit a capital gains tax at a rate of 28% on
these collectibles when they go to sell them, this same sales tax
exemption is not afforded to other valuable assets that are held for
investment.
In 2025, alone, two large mull-nation banks purchased around $4 billion
in gold bullion for investment as a hedge against losses on short posi-
tions.
This sales tax exemption for high-value purchases of precious metal
bullion costs the state a stunning $601 million in lost revenue.
 
PRIOR LEGISLATIVE HISTORY:
None
 
FISCAL IMPLICATIONS:
This bill could provide the state an additional $601 million in revenue
 
EFFECTIVE DATE:
This act shall take effect on the first day of the quarterly sales tax
period as set forth in subdivision (b) of section 1136 of the tax law
next succeeding the thirtieth day after it shall have become a law.

Statutes affected:
S7875: 1115 tax law