Prohibit tax liability on the purchase, sale, or exchange of gold or silver bullion, change sales tax exemption provisions relating to currency and bullion, and provide an income tax adjustment for net capital losses and gains on the sale or exchange of gold or silver
Impact
If enacted, LB1305 would impact how the state addresses taxation of precious metals, specifically by eliminating tax burdens that currently apply. This change is expected to encourage individuals and investors to engage more actively in the buying and selling of gold and silver, potentially increasing market liquidity. The adjustments in sales tax provisions could also lead to broader implications for local tax revenues, depending on how transactions are affected.
Summary
LB1305 seeks to amend state tax laws by prohibiting tax liability on the purchase, sale, or exchange of gold or silver bullion. This legislation aims to facilitate transactions involving precious metals, which supporters argue can promote economic activity and investment in these assets. The bill also proposes changes to existing sales tax exemption provisions related to currency and bullion, making it more favorable for individuals and businesses dealing in these commodities.
Contention
Despite its potential benefits, LB1305 may face opposition from those who argue that tax exemptions on bullion purchases could lead to significant revenue losses for the state. Critics may express concerns over the long-term fiscal impacts, particularly if the exemption is expected to cause broader deviations from established taxation principles. Additionally, there could be debate around the fairness of such tax breaks in the context of overall state budgetary needs and priorities.
Concerning the taxation of precious metal bullion made of gold and silver and monetized bullion, and providing that the use of bullion as tender is voluntary.