New Jersey Governor Phil Murphy has exercised his veto power to halt a bill that aimed to exempt the sales tax on gold and silver purchases. Despite the overwhelmingly positive reception of Bill A5294/S1825, which received unanimous approval in both committees and chambers of the New Jersey legislature, Governor Murphy opted for a pocket veto, preventing its enactment into law.
A pocket veto, applicable to bills passed in the last 10 days of a two-year legislative session, does not require the governor to return the bill to the legislature for a potential override, as reported by Bloomberg.
In contrast to New Jersey’s decision, several states, including Alabama, Tennessee, Virginia, Mississippi, and Ohio, have recently enacted legislation to exempt gold and silver from state sales tax. Notably, 43 states, including all neighboring states of New Jersey, have already abolished sales tax on these precious metals.
The push to end this tax in New Jersey continues with the reintroduction of two pieces of legislation: A2812/S721. Advocates argue that discriminatory tax policies discouraging precious metals ownership diminish citizens’ ability to safeguard themselves from inflation and financial turmoil linked to the Federal Reserve System.
The rationale for ending sales tax on precious metals purchases includes its illogical application, as these metals are held for resale, not consumption. Studies, such as the one conducted in Michigan, reveal that taxing precious metals is an inefficient revenue collection method, potentially driving economic activity out of the state.
Moreover, taxing gold and silver harms in-state businesses, as buyers may seek neighboring states without such taxes, undermining local jobs. Advocates emphasize that gold and silver, mentioned in the U.S. Constitution as legal tender, should not be subject to sales tax, distinguishing them from other forms of savings or investment.
While more than a dozen states, including New Jersey, have introduced pro-sound money legislation in 2024, the debate over the taxation of precious metals persists, affecting small-time savers and shaping financial policies across the nation.
