Please note that we are not tax experts, and all information below is for informational purposes only. Do not rely on our information when making your investments, and note that you may be responsible for paying a “use tax” within your state.
When one is looking to make an investment in silver bullion, specifically silver bars, the decision is typically not one of impulse. Rather, buying silver is seen as an investment, and when investing in silver it makes very little sense to buy only a solitary ounce or two.
To invest in silver without paying an up front sales tax, visit JMBullion.com, who is located in Pennsylvania, a state which does not charge sales tax on precious metals.
Instead, most investors buy multiple, even hundreds of ounces at a time in order to maximize the gains they hope to see on their initial investment. When you are purchasing at these quantities, any small change in price becomes a huge difference in your initial investment.
Sales Taxation on Silver Bullion
That being said, paying sales tax on a silver bullion purchase is suicidal to your returns. Given there are viable options for avoiding this sales tax, you would be a fool to pay sales tax on your silver investment.
If you have lived in the United States for any amount of time, you are well aware that there is sales tax on just about everything you buy with the exception of food and clothing. In addition to there being tax everywhere in the US, the percentage of each dollar that the tax charges changes as you move from state to state.
Tax is added to every dollar you spend in a purchase, so if you spend $10 with a 5% tax rate you can expect an additional charge of 5 cents per dollar, or a total of 50 cents.
In this small example, 50 cents may not seem like too much of a premium, but in terms of silver bullion the amount of money you will typically be spending is much more than $10, which means that the additional charges caused by sales tax would be a lot more than 50 cents.
If we take that same 5% tax example on a silver bar purchase of $5,000, you will be spending an extra $250 in taxes alone; quite the sizable additional charge. Silver would have to appreciate 5% just for you to break even. This excessive tax, as well as any others, can be avoided if you purchase silver bars online.
Buying Tax-Free Online
The reason for this is that most online purchases are inter-state purchases, meaning the retailer is not responsible for collecting sales tax at the time of purchase. The customer may or may not be responsible for paying “use” tax when importing goods from another state, but fortunately these rules vary state to state and are loosely enforced.
Before you ever make a purchase trusting that there will be no tax, it is important that you verify that belief as the laws are always changing. Ask your online retailer if they charge sales tax, and if not, find out if your local laws require you to pay use tax. By purchasing tax-free online, you can save 5 or even 10% over purchasing at a local dealer in taxed states.