FRANKFORT, KENTUCKY – A legal and fiscal debate continues regarding the sales tax on gold and silver bullion in Kentucky, following the passage of a tax revenue bill earlier this year. The situation arises from House Bill 8, which included provisions to exempt currency made of gold, silver, platinum, and palladium from the state’s 6% sales tax. However, Governor Andy Beshear exercised a line-item veto on that section, stating that wealthier individuals could afford to pay sales tax on such items.
The governor’s veto, executed in the spring of 2023, was not overridden by the legislature, despite arguments that it was beyond his authority to line-item veto revenue-related provisions under House Bill 8. Attorney General Russell Coleman supported this view, declaring that the veto could not be applied because the bill was not classified as an appropriation bill.
The outcome has left dealers in a precarious position. As it stands, Kentucky retailers continue to collect sales tax on bullion, creating confusion among consumers and potential legal ramifications for dealers. The National Coin and Bullion Association has expressed concerns, indicating that the tax collection could ignite consumer backlash and lead to class-action lawsuits if customers believe they are being overcharged. On the other hand, failure to collect the tax might result in penalties from the Kentucky Department of Revenue.
The current status of the sales tax on bullion remains unclear, with legal interpretations suggesting that ongoing litigation could ultimately determine the matter. The Kentucky Department of Revenue confirmed that “the sale, use, storage or other consumption of currency or bullion currency continues to be subject to the sales and use tax.”
As the situation unfolds, lawmakers and taxpayers await further clarity. For now, both consumers and dealers operate under the framework established by the conflicting interpretations of legislative intent and the authority of the governor’s veto.
For those seeking to understand the implications of this sales tax debate, continuing to monitor legislative discussions and court rulings will be essential.
