One of the first things new legislators say to me when they review the “Tax Exemptions 2008” report from the department of revenue is that we should eliminate the tax exemptions for gold bullion and bull semen sales. They stick out as crazy exemptions. NPR even did a story on the bullion loophole.
Governor Gregoire talked about it on the campaign trail in 2004. Last week when she proposed closing some tax loopholes she included removing the bullion exemption in her proposed legislation. She removed both a B&O exemption and a sales tax exemption bullion dealers have had for a long time. I sponsored her legislation (a routine courtesy offered by committee chairs to Governors) and had a hearing on it early this week.
The coin and bullion industry made a compelling case that removing the sales tax exemption would result in a significant loss of sales. The fiscal note from the Department of Revenue confirms this, estimating a loss of 70% of the business. This is why there is a sales tax exemption.
Bullion dealers also have an exemption from the B&O tax. This tax is assessed at the retailing rate of 0.471%. It’s one of the lowest B&O rates around. This is the basic business tax in Washington.
This week I released a bill (HB 3176) that terminates some exemptions, clarifies some parts of the law the Supreme Court seems confused about and fixes some other problems. In it I propose repealing the B&O exemption, but not the sales tax exemption for gold bullion sales.
The Seattle Times wrote an editorial today about the bill titled “State legislators should resist urge to raise taxes.”
They say “Standing by is House Bill 3176, an 89-page compendium of loophole closers, all of which give the state more money. This page supports parts of HB 3176, much of which has been introduced in separate bills.”
After the nice bits they go on to excoriate me for closing the sales tax exemption for bullion dealers, which I didn’t do. Usually they treat me pretty well so I can’t complain too loudly, but I’m innocent on this one.