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.