Kentucky Becomes 45th State to Remove Sales Tax on Precious Metals

In a noteworthy legal battle, the Kentucky legislature has overridden Gov. Andy Beshear’s line-item veto to exempt gold and silver from sales tax, marking Kentucky as the 45th state to adopt such a policy. The move, effective from August 1, positions the state alongside others that have recognized the value of sound money.

The exemption, introduced by Rep. Steven Doan and supported by the Sound Money Defense League among others, applies to purchases of precious metals including gold, silver, platinum, and palladium. This decision emerged from recognizing that precious metals, often considered a hedge against inflation, should not be taxed similarly to consumer goods since they are primarily held for investment or savings.

Gov. Beshear's attempt to veto the exemption was deemed illegal by the legislature, citing the constitutional limitation on governors’ line-item veto powers. This decision underscores the growing consensus against taxing investments in precious metals, which are seen as critical for ensuring economic stability and protecting individual wealth against inflation.

The policy change not only aligns with the principles of sound money but also aims to spur economic activity and competitiveness in Kentucky by eliminating what many see as an irrational tax. Advocacy for the exemption stressed its importance for small-time savers and in-state businesses, arguing that it levels the playing field with other investment instruments that are not subject to sales tax.