Many people pay more taxes than necessary because they misunderstand tax laws, and miss out on deductions and credits that they don’t realize are available to them. However, precious metals buyers can avoid taxes by taking advantage of certain eligibilities*. So, what’s the difference between tax avoidance and tax evasion?
Tax Avoidance—An action taken to lessen tax liability and maximize after-tax income.
Tax Evasion—The failure to pay or a deliberate underpayment of taxes.
The IRS relies on a system of voluntary compliance that depends on individual citizens to report their income freely and voluntarily, calculate their tax liability correctly, and file a tax return on time. Tax evasion, which includes not reporting all earned income, is illegal.
What You Should Know About Sales Tax
In 2018, in South Dakota v. Wayfair the Supreme Court ruled that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. This complicated things considerably, since 9 states charge sales tax on bullion, each with different tax rates, taxable and exempt products and services, exempt purchasers, shipping tax treatment, specialized tax rules (such as sales tax “holidays” and “thresholds” for different products), etc.
In addition, certain states and taxing jurisdictions are taking this opportunity to now start charging sales tax, because many state and local governments are broke and need the revenue.
How to Avoid Sales Tax on Metal Purchases
So, how can you as a tax-paying precious metals owner avoid paying more than you need to in sales tax on your metal purchases? The simple answer is store your metals overseas or in one of the 41 states that do not currently charge sales tax.
Sales tax is based on where the precious metals are delivered… not where they were purchased… and not where the client who purchased them resides.
Going forward, taking delivery of precious metals in most states will require the precious metals dealer to charge the client a sales tax. You’ll be able to avoid 6%, 7%, or even 8% sales tax on top of the cost of precious metals if you choose to store your metal in non-taxing jurisdictions.
We offer a few great options…
• PMDDO - ASI and The Perth Mint in Australia have partnered to bring you the world’s most cost-effective and flexible way to buy, sell, store, and deliver gold, silver, and platinum 24/7 online under an explicit government guarantee. All the metals purchased through the Perth Mint Depository Distributor Online (PMDDO) are Perth Mint-issued bullion from the Mint’s working inventory, and investors even have the option to store their unallocated metals for free in one of the world’s most secure storage facilities.
• PMCP – If you love the idea of storing your metals with the Perth Mint, but aren’t as savvy about online platforms, the Perth Mint Certificate Program (PMCP) allows you to store your precious metals holdings internationally, with the same government guarantee as PMDDO, and clients are granted legal title to precious metals stored in unallocated, allocated, or pool allocated accounts. The PMCP is ideal for those looking for confidentiality, flexibility, and a safe haven for their precious metals holdings.
• PMC Ounce™ - The PMC Ounce™ is a diversified, weighted, and patented physical precious metals investment asset. Each PMC Ounce™ consists of a fixed fractional quantity of gold, silver, platinum, and palladium backed 100% by physical bullion. The bullion backing the PMC Ounce™ is stored in an allocated and insured account at a non-bank bullion depository.
• IDS Toronto, Delaware, or Texas - International Depository Services (IDS) Group is the largest privately held U.S.-based precious metals storage and logistics solution for the bullion market. IDS Group offers segregated, all-risk insured storage and distribution services for institutional investors, IRA custodians, sovereign mints, bullion banks, wealth managers, and private individuals. With three full-service vaulting operations that boast state-of-the-art security, privacy, and efficiency in Texas, Delaware, and Toronto.
• SWP - Strategic Wealth Preservation (SWP) specializes in the secure storage and acquisition of precious metals for investors who are seeking a premier offshore storage solution located in the Western Hemisphere. Independently owned and privately operated, SWP is the best and closest offshore storage option for North American investors seeking to internationalize their hard assets. They are also an approved storage facility for self-directed precious metal IRAs. SWP provides clients with fully allocated, segregated, and insured secure storage of their physical gold and other precious metals.
• ASI Precious Metals Direct - ASI Precious Metals Direct (ASIPMDirect), ASI’s online precious metals trading platform, offers seamless management and storage of your precious metals domestically and abroad. If you’re looking to avoid paying sales tax, then the overseas storage options in London, Zurich, Singapore, and Sydney are your best bet.
As a precious metals owner, the way to get the most out of your investment is by choosing storage options at a low cost to you. If taking home delivery of your metals is no longer the most financially responsible option, then take advantage of options in non-taxed jurisdictions to safely store your metals. There’s a variety of options that precious metals owners can use to legally avoid sales tax and pay the lowest premiums for storage on the metal in their portfolio.
Give one of our Preferred Client Representatives a call at 800-831-0007 or email us to explore the best options for you to avoid the negative effects of South Dakota vs. Wayfair*.
*Asset Strategies International is neither a financial advisor nor a tax advisor. Consult your CPA or Tax Attorney today before making any decision regarding tax avoidance with your precious metals.