If you buy a candy bar in New York, you pay a sales tax. If you buy a solid gold bar, your purchase is tax-free.<\/p>\n
That doesn\u2019t make much sense to Democrats in the state Senate who are pushing to repeal a tax break that\u2019s been on the books for 37 years \u2014 a move they believe could boost the state\u2019s coffers by hundreds of millions of dollars a year.<\/p>\n
New York does not charge tax on the sale of bars and coins made out of gold, silver, platinum and other precious metals that are purchased for investment purposes, which are known as bullion. It\u2019s far from alone: At least 40 states have a similar tax exemption, according to the National Coin and Bullion Association<\/a>.<\/p>\n Now, Senate Democrats want to restore the bullion sales tax as part of ongoing negotiations over the roughly $260 billion state budget<\/a>. But they\u2019ve run into opposition from Gov. Kathy Hochul\u2019s administration and gold dealers across the state who argue it could destroy New York\u2019s thriving market by pushing sales to other states \u2014 or even overseas.<\/p>\n \u201cThe real issue is if people have to pay 8% sales tax, that’s far more than we would make,\u201d said Geoffrey Demis, a co-owner of Ferris Coin and Jewelry in the Albany area. \u201cAnd the result is our customers, they\u2019ll just go to neighboring states. They just won\u2019t make any bullion purchases in New York.\u201d<\/p>\n The tax break dates back to 1989 and applies to bullion sales of at least $1,000.<\/p>\n Then-Gov. Mario Cuomo and state lawmakers approved it at the request of then-New York City Mayor Ed Koch, who argued that similar tax exemptions in Rhode Island and Delaware allowed those states to take a chunk out of what had been the city\u2019s dominance of the sale and storage of gold and silver.<\/p>\n The bill\u2019s sponsor \u2014 the late state Sen. Owen Johnson, a Republican from Long Island \u2014 argued bullion should be treated the same as other investments<\/a>, like stocks, securities and futures. At the time, 15 states had similar tax breaks and the number has risen steadily since.<\/p>\n He also argued that exempting precious metals would lead to an increase in storage fees in New York, which are subject to sales tax. Storage in a private vault in New York City\u2019s Diamond District today costs about 0.35% of the gold\u2019s value annually<\/a>.<\/p>\n These days, state Sen. Andrew Gounardes of Brooklyn is leading the charge to reinstate the sales tax on bullion sales. In New York City, the tax is 8.875%; in other parts of the state, it\u2019s between 7% and 8.875%, depending on the county.<\/p>\n The Democrat said he came across it when he was reading the state Department of Taxation and Finance\u2019s annual tax expenditure report, which estimates the exemption cost the state about $600 million last fiscal year. That\u2019s a big jump from prior years, in part because the price of gold has more than doubled since 2024 to its current price of nearly $4,700 a troy ounce, the unit of measurement for precious metals.<\/p>\n One troy ounce of gold is roughly the size of a thicker silver dollar.<\/p>\n \u201cIt just blew my mind that in this day and age, people who buy gold get a tax break,\u201d Gounardes said.<\/p>\n The state Senate included a series of tax hikes in its state budget proposal last month<\/a>, including a repeal of the bullion tax break. Assembly Speaker Carl Heastie, a Bronx Democrat, signaled he may be open to supporting it, too.<\/p>\n But gold-and-silver dealers say lawmakers would be making a major mistake.<\/p>\n Among them is Demis, who carries a variety of bullion in his shop a few miles from the state Capitol that dates back to 1930. His inventory varies from a 1 gram gold piece that\u2019s about the size of a thumbnail, to coins with maple leaves or eagles or President Donald Trump\u2019s face on them, to larger bars worth thousands of dollars.<\/p>\n Demis said bullion is a volume business and dealers generally work on a 1% to 2% margin. Charging a sales tax would destroy the business model, he said. And bullion sales, much like stocks, are taxed as income if they sell for more than the original purchase price.<\/p>\n Scott Hunt, president of Jack Hunt Coin Broker, a major supplier based in the Buffalo area, said bullion has grown in popularity in recent years and should be treated as any other investment. Some investors buy gold and silver to hedge against the markets, he said.<\/p>\n \u201cJust like someone would say, for instance, buy a share of IBM or invest in a bond, you’re purchasing the item hoping that somewhere down the road you earn a return,\u201d Hunt said.<\/p>\n The gold dealers have also circulated a memo to lawmakers, arguing that the Tax Department\u2019s $600 million cost estimate for the tax exemption is inflated.<\/p>\n Lawmakers will need Hochul on board if they\u2019re going to repeal the tax break. So far, there\u2019s little sign she\u2019s amenable to it.<\/p>\n Blake Washington, Hochul\u2019s budget director, raised concern about unintentionally roiling New York City\u2019s gold market \u2014 which is one of two major global markets, along with London.<\/p>\n The New York City market is largely focused on gold futures contracts, which are not subject to sales tax. London\u2019s market, meanwhile, has a bigger focus on the sale of gold bars and other physical bullion.<\/p>\n But there are times where that can shift. Last year, for example, the Wall Street Journal reported<\/a> banks were shipping gold from London to New York in large quantities when Trump took office threatening tariffs.<\/p>\n \u201cAny person that’s in my position should be very wary of tinkering with a program where you’re in a global competition where the asset is highly movable,\u201d Washington told reporters last week.<\/p>\n Gounardes\u2019 proposal, meanwhile, takes steps to try to mitigate the potential negative impact of repealing the tax break.<\/p>\n It includes an exception for any purchases and sales by the federal government, central banks or foreign governments. That\u2019s designed to account for New York\u2019s status as a major storage center for gold owned by governments and central banks, with the Federal Reserve Bank of New York housing an estimated 507,000 gold bars weighing a combined 6,331 metric tons<\/a> in a vault on the basement floor of its main office in Manhattan.<\/p>\n The senator held a video call with gold dealers from across the state late last month, including Demis and Hunt. He heard them out, and all sides said the call remained civil.<\/p>\n But Gounardes said he\u2019s undeterred.<\/p>\n \u201cAnyone making these investments, anyone making these purchases, we think they should be subject to tax,\u201d he said. \u201cIf I have to pay tax on a pencil case for my kid’s school, why shouldn\u2019t someone buying a Glenn Beck gold coin have to pay tax?\u201d<\/p>\n Hochul and lawmakers continue to negotiate a state budget, which was due April 1. They\u2019ve passed a pair of short-term extenders that ensures state employees will be paid through Monday, buying them extra time.<\/p>\n","protected":false},"excerpt":{"rendered":"If you buy a candy bar in New York, you pay a sales tax. 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