COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0466S.02I Bill No.:SB 100 Subject:State Treasurer; Taxation and Revenue - Income; Property, Real and Personal Type:Original Date:January 24, 2023Bill Summary:This proposal creates and modifies provisions relating to gold and silver.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026General Revenue* (Unknown) (Unknown) (Unknown)Total Estimated Net
Effect on General
Revenue
Unknown to
(Unknown)
Unknown to
(Unknown)
Unknown to
(Unknown)
*Oversight assumes the negative unknown (from the deduction of capital gains from sale of gold
and/or silver from MAGI, the establishment of the Missouri Bullion Depository within the Office
of the State Treasurer, and the removal of gold and silver from being seized) would exceed the
$250,000 threshold.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Budget Reserve Fund
(0100)
Unknown to
(Unknown)
Unknown to
(Unknown)
Unknown to
(Unknown)
Total Estimated Net
Effect on Other State
Funds
Unknown to
(Unknown)
Unknown to
(Unknown)
Unknown to
(Unknown)
*Oversight assumes the positive or negative unknown (from the requirement of investing 1% of
the Budget Reserve Fund in gold and/or silver) could reach the $250,000 threshold
Numbers within parentheses: () indicate costs or losses. L.R. No. 0466S.02I
Bill No. SB 100
Page 2 of
January 24, 2023
RAS:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0$0$0 L.R. No. 0466S.02I
Bill No. SB 100
Page 3 of
January 24, 2023
RAS:LR:OD
FISCAL ANALYSIS
ASSUMPTION
Section 30.266 – STO Budget Reserve Fund Investment
Officials from the Office of the State Treasurer (STO) state investments made by the Missouri
State Treasurer’s Office are determined by the state constitution, not by statute. The fiscal impact
to the State Treasurer’s Office would be unknown.
Officials from the Office of Administration - Budget and Planning (B&P) state this section
requires the State Treasurer’s Office to invest at least 1% of the Budget Reserve Fund in gold or
silver. B&P defers to STO for the potential impact of this provision.
Officials from the Department of Revenue (DOR) state this allows the STO to invest in gold or
silver. This will not fiscally impact DOR.
Depending on how the market for gold and/or silver performs, Oversight
unknown gain or an unknown loss of funding to the General Revenue Fund for the new
requirement of one percent of the Budget Reserve Fund (0100) to be invested in gold or silver.
The balance of the Budget Reserve Fund at fiscal year-end (June 30, 2022) was $772,139,203.
The balance of the fund at December 31, 2022 was $880,194,125. Therefore, for example, a 1%
difference in the return on investment for the year between current investments vehicles used by
the STO and other options such as gold and silver would be roughly $88,000 ($880,194,125 x
1% of the funds to be invested in gold or silver x 1% difference in the rate of return for
example), positive or negative. For fiscal note purposes, Oversight will reflect an unknown gain
or an unknown loss of investment principal and income. According to Article IV Section 27(a)
of the Missouri Constitution, interest earned on funds in the Budget Reserve Fund shall be
credited back to the Budget Reserve Fund.
Oversight notes, as of December 31, 2022, the STO reported having roughly $16.5 billion in
cash and investments.
Section 143.121 Capital Gains and MAGI
DOR notes this requires that a taxpayer subtract the amount of capital gain on the sale or
exchange of gold or silver from their Missouri adjusted gross income if it was reported in their
federal adjusted gross income. The Department is unable to determine how many people report
capital gains on gold or silver or how much would be subtracted from their Missouri adjusted
gross income. Should subtracting this capital gain decrease a taxpayer’s adjusted gross income, L.R. No. 0466S.02I
Bill No. SB 100
Page 4 of
January 24, 2023
RAS:LR:OD
then this could result in a loss of revenue to the state. The impact is unknown but could be
significant, over $1 million.
This will require an additional line be added to the MO-A form, information would need to be
added to their website and this would need to be added to their individual income tax computer
system. These costs are estimated at $7,193.
B&P notes this section would allow Missouri taxpayers to subtract any capital gains from the
sale or exchange of gold and/or silver from the taxpayer's Missouri Adjusted Gross Income
(MAGI), if such capital gains were included in the taxpayer's Federal Adjusted Gross Income
(FAGI), beginning with tax year 2024.
B&P is unable to determine how the amount of capital gains claimed by Missouri taxpayers.
However, the total amount of capital gains claimed during tax year 2020, the most recent
complete year available, was $6,397,177,469. If even 1% of the capital gains resulted from the
sale or exchange of gold and/or silver, B&P estimates that the loss to GR would have been
$3,166,603 ($6,397,177,469 x 1% x 4.95%). Therefore, B&P estimates that this provision may
have an unknown, but significant, loss to TSR and GR beginning with FY25 (for tax year 2024
capital gains).
Oversight will reflect an unknown loss, potentially significant, to the General Revenue Fund
from this section.
Section 408.010 Legal Tender and Section 408.012 Making Coins
DOR notes Section 408.101 allows gold and silver coins to serve as legal tender of the U.S. for
payment of debts. It should be noted that they are already considered legal tender, though not
widely used in financial transactions.
This requires that any costs to determine the weight or purity of any gold or silver received
would be borne by DOR when a taxpayer uses it as payment. This could result in additional
costs to DOR. Since DOR is unable to predict how common payment with gold or silver would
occur it is unable to estimate a fiscal impact. DOR assumes an unknown negative impact.
DOR notes Section 408.012 would allow taxpayers to produce gold and silver coins. While it is
currently legal to produce your own coins those coins cannot be used as currency. Under 18 U.S.
§ 486, it's a criminal offense to make or pass any metal coins "intended for use as current money,
whether in the resemblance of coins of the United States or of foreign countries, or of original
design." An offense is punishable with up to 5 years in prison, a fine, or both.
If the intention of this proposal is to allow people to produce coins they can use as legal tender, it
appears that intention is in direct conflict with federal law. DOR assumes no fiscal impact from
this proposal. L.R. No. 0466S.02I
Bill No. SB 100
Page 5 of
January 24, 2023
RAS:LR:OD
B&P notes Section 408.010 would allow gold and silver coinage to be legal tender in Missouri.
Section 407.012 would allow individuals and businesses to produce and sell their own gold
and/or silver coins.
B&P notes that certain gold and silver coins are already considered legal tender under Federal
law. However, Federal law prohibits the use of privately created gold and/or silver coins from
being used as currency. Therefore, it is unclear how the changes to these two sections would
work together.
Oversight will reflect a potential cost to various state agencies that accept payments – if they are
required to verify the weight and purity of any gold or silver coinage used as currency. For
simplicity, Oversight will only reflect this potential cost in the General Revenue Fund
Section 408.014 STO & Missouri Bullion Depository
DOR notes this provision creates the Missouri Bullion Depository with the STO office. DOR
defers to them for fiscal impact.
B&P state this section would create the Missouri Bullion Depository within the State Treasurer’s
Office (STO). B&P defers to STO for the potential impact of this provision.
Oversight notes the STO did not address this section in their response to the bill and have not
responded to our subsequent request to do so. Oversight will assume an unknown amount of
costs to the STO for establishing and maintaining the Missouri Bullion Depository.
Section 513.090 Gold & Silver not seized
DOR notes this provision removes gold and silver from being seized by the courts. If a taxpayer
owes DOR back taxes, they would have the opportunity to move all their income to gold or silver
and prohibit DOR from being able to collect the back taxes owed. DOR is unable to determine
how this will impede collection efforts. The impact is negative but unknown.
B&P notes this section would prohibit the seizure of gold and silver coins by any court. B&P
notes that this would allow individuals and businesses to store or move assets into gold and/or
silver in order to avoid having assets seized. This would allow taxpayers to move their assets to
gold and/or silver coins in order to avoid paying back taxes to the state. Therefore, this provision
may have a negative unknown impact to TSR, GR, as well as other state and local funds.
Bill as a whole:
Officials from the Office of Administration assume the proposal would not fiscally impact their
agency. L.R. No. 0466S.02I
Bill No. SB 100
Page 6 of
January 24, 2023
RAS:LR:OD
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor.
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUE Loss – DOR §143.121 – capital gains
on the exchange of gold and silver now
a deduction for MAGI calculation
(Unknown –
potentially
significant)
(Unknown –
potentially
significant)
(Unknown –
potentially
significant)
Costs – Various State Agencies -
§408.010 – potential cost to verify the
weight and purity of any gold or silver
coinage received as payment
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
Costs – STO – §408.014 - develop and
maintain the Missouri Bullion
Depository (includes unknown FTE)
(Unknown)(Unknown)(Unknown)
Loss – DOR §513.090 – removal of
gold and silver coins as seizable assets
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT TO
GENERAL REVENUE (Unknown) (Unknown) (Unknown) L.R. No. 0466S.02I
Bill No. SB 100
Page 7 of
January 24, 2023
RAS:LR:OD
FISCAL IMPACT – State Government
(continued)
FY 2024
(10 Mo.)
FY 2025FY 2026BUDGET RESERVE FUND (0100)Income/Loss - §30.266 – STO must
invest at least 1% of Budget Reserve
Fund in gold and/or silver
Unknown or
(Unknown)
Unknown or
(Unknown)
Unknown or
(Unknown)
ESTIMATED NET EFFECT TO
THE BUDGET RESERVE FUND
(0100)
Unknown or
(Unknown)
Unknown or
(Unknown)
Unknown or
(Unknown)
FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0
FISCAL IMPACT – Small Business
Small businesses that invest in gold and silver could be impacted by this proposal.
FISCAL DESCRIPTION
This act modifies and creates new provisions relating to bullion, or gold and silver.
INVESTMENT OF PUBLIC FUNDS IN GOLD AND SILVER
(Section 30.266)
The act requires the State Treasurer to invest not less than 1% of the funds held in the Budget
Reserve Fund in gold and silver.
INCOME TAXATION ON GOLD AND SILVER
(Section 143.121)
Current law exempts all purchases of bullion and investment coins from all state and local sales
taxes. This act additionally exempts from state income tax the portion of capital gain on the sale
or exchange of gold and silver that are otherwise included in the taxpayer's federal adjusted gross
income. L.R. No. 0466S.02I
Bill No. SB 100
Page 8 of
January 24, 2023
RAS:LR:OD
GOLD AND SILVER AS LEGAL TENDER
(Section 408.010)
The act declares that gold and silver shall be accepted as legal tender, at their par value, and shall
be receivable in payment of all debts, public and private, contracted for in the state of Missouri.
Costs incurred in the course of verification of the weight and purity of any gold or silver during
any such transaction shall be borne by the receiving entity. No person or entity shall be required
to use gold or silver issued by the federal government in the payment of any debt. Nothing in this
act shall prohibit the use of Federal Reserve notes in the payment of any debt. Except as
otherwise provided in certain criminal cases, under no circumstance shall the state of Missouri or
any department, agency, court, political subdivision, or instrumentality thereof seize from any
person any bullion that is owned by such person.
PRODUCTION AND SALE OF GOLD AND SILVER COINS
(Section 408.012)
The act permits any person or entity to produce and sell gold or silver coins in this state,
provided the coins are labeled in a clear and intelligible manner noting the weight and purity of
the coin and provided further that the person or entity has complied with current provisions of
law governing the sale of precious metals.
MISSOURI BULLION DEPOSITORY
(Section 408.014)
The act creates the Missouri Bullion Depository. The Depository is established as an agency
within the office of the State Treasurer for the purpose of serving as the custodian, guardian, and
administrator of certain bullion and specie that may be transferred to or otherwise acquired by
this state or any department, agency, or political subdivision thereof.
The Depository is permitted to receive a deposit of bullion or specie, as such terms are defined in
the act, from or on behalf of a person acting in the person's own right, as trustee, or in another
fiduciary capacity, in accordance with rules adopted by the Treasurer, as outlined in the act. The
Depository shall keep and maintain records of the bullion and specie that each person deposits.
The Treasurer shall adopt standards by which the quantities of bullion and specie deposited are
credited to a depositor's depository account by reference to the particular form in which the
metals were deposited. The standards must conform to applicable national and international
standards of weights and measures. The Treasurer may, if it is in the public interest, restrict the
forms in which deposits may be made.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space. L.R. No. 0466S.02I
Bill No. SB 100
Page 9 of
January 24, 2023
RAS:LR:OD
SOURCES OF INFORMATION
Office of Administration - Budget and Planning
Department of Revenue
Office of Administration
Office of the State Treasurer
Joint Committee on Administrative Rules
Office of the Secretary of State
Julie MorffRoss StropeDirectorAssistant DirectorJanuary 24, 2023January 24, 2023