SB 5894
In CommitteeSenate
Precious metals tax exempt.
Restoring the 1985 tax exemptions for the sale of precious metals and bullion.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill reinstates a 1985 law that exempts sales of precious metal bullion and monetized bullion (like gold/silver coins used as currency) from Washington’s sales and use taxes. It also clarifies how dealers calculate business-and-occupation (B&O) tax on such sales. The law takes effect immediately and applies retroactively to January 1, 2026.
- Restores the 1985 law that exempted precious metal bullion and monetized bullion from state sales and use taxes.
- Defines 'precious metal bullion' as gold, silver, platinum, rhodium, or palladium that has been refined and whose value is based on its metal content—not its form (e.g., bars or ingots).
- Defines 'monetized bullion' as government-issued coins or money made from precious metals and used as legal tender—but excludes coins sold to be turned into jewelry or art.
- Allows dealers to calculate business-and-occupation (B&O) tax only on commissions earned (not on the full value of bullion sold), with no deduction for employee salaries or commissions.
- Makes the law effective retroactively to January 1, 2026, and declares it an emergency to take effect immediately upon passage.
Who is affected
- Precious metals dealers and individual investors — Buyers and sellers of precious metal bullion (e.g., gold or silver bars, coins) and monetized bullion (e.g., government-issued coins used as currency) will no longer pay state sales or use tax on these transactions.
- Precious metals retailers and dealers — Retailers and dealers who sell bullion or monetized bullion will no longer collect or remit sales tax on those specific transactions, but must still report and pay tax on commissions earned (after deducting amounts paid to other dealers).
- State and local governments — State and local governments will lose tax revenue from sales of bullion and monetized bullion, which were previously taxed under changes made in 2025.
- Individual investors — People who buy bullion or monetized bullion as investments or savings tools will save money on purchases, since they won’t pay the state’s sales tax.
Pro/Con Analysis
Potential Benefits (3)
Individual investors purchasing bullion (e.g., gold/silver bars or government coins used as currency) will avoid paying 6.5–10.4% state sales tax per transaction, saving money on investment purchases—though this primarily benefits those with disposable income to invest in bullion, not low-income households.
FinancialPeopleRef: Sec. 2(1); Sec. 2(3)(a)Precious metals dealers will no longer be taxed on the full transaction value, only on commissions, reducing tax liability for firms operating on thin margins—though the disallowance of salary/commission deductions may offset some savings for small dealers.
Business & EmploymentRef: Sec. 2(2); Sec. 2(3)(b)The exemption for monetized bullion (e.g., U.S. Gold Eagles, Silver Eagles used as legal tender) may encourage more Washington residents to use bullion as a savings vehicle, potentially increasing financial resilience for middle-class savers—but only for those with sufficient capital to invest in $1,000+ bullion lots.
FinancialLean peopleRef: Sec. 2(3)(a); Sec. 2(1)
Potential Concerns (4)
The state and local governments will lose $12 million in FY 2026 and $15 million in FY 2027 in tax revenue, which could reduce funding for public services like education, transportation, and healthcare—services that many everyday Washingtonians rely on.
FinancialRef: Sec. 2(2); Fiscal NoteWhile the bill does not directly affect housing, the loss of $27 million over two years may reduce local government capacity to fund affordable housing programs, especially in counties with high bullion transaction volumes (e.g., King, Snohomish), indirectly harming low- and middle-income renters and homebuyers.
HousingPeopleRef: Sec. 2(1); Sec. 2(3)(a)The B&O tax change—taxing only commissions (not full transaction value) but disallowing deductions for employee salaries—may disproportionately benefit larger bullion dealers with higher commission-based models over small, full-service dealers who rely on staff to manage inventory and client services.
Business & EmploymentRef: Sec. 2(2); Fiscal NoteThe exclusion of coins sold to be turned into jewelry or art creates a complex, line-drawing compliance burden for small dealers who may lack legal expertise to distinguish taxable vs. exempt transactions, increasing administrative costs for micro-businesses.
Business & EmploymentRef: Sec. 2(3)(b); Sec. 2(1)
Who Is Most Affected
High-net-worth individuals and institutional investors who buy bullion as a store of value will save significant money on large transactions (e.g., $100,000 gold bar purchase saves ~$6,500–$10,400 in state sales tax), but this benefit is concentrated among the top 10% of wealth holders.
Small bullion dealers (e.g., coin shops, online resellers) benefit from reduced tax on commissions but face new compliance complexity and may lose business to larger, commission-focused dealers if they cannot absorb the salary deduction ban.
State and local governments lose meaningful revenue that could have funded K–12 schools, community health clinics, or transit agencies—especially impactful in counties with high bullion transaction volumes where local budgets are already strained.
Middle-class savers who buy small bullion lots (e.g., $500–$5,000 in coins) may benefit modestly, but the effect is limited because most everyday Washingtonians do not hold bullion as an investment, and the savings are regressive relative to income.
Low-income households and communities reliant on public services face indirect harm as reduced tax revenue may lead to cuts in social services, though they are unlikely to be direct buyers of bullion.