Signed into law: Alabama abolishes income taxes on Gold and Silver
|On May 14, 2024, Alabama Governor Kay Ivey signed a bill that removes all income taxes on capital gains from the sale of gold and silver, enabling the state to take an important step forward in reinforcing sound money principles.
With this move, Alabama joins a growing number of states prioritizing the protection of citizens against the deleterious effects of inflation, currency debasement, and mounting federal debt.
Enactment of Senate Bill 297 makes Alabama the 13th state in the nation that does not impose capital gains taxes on sales of gold and silver.
Under the new law’s provisions, any profits or losses arising from the sale of precious metals, as reported on federal tax returns, will be excluded from the calculation of an Alabama taxpayer's adjusted gross income (AGI). This measure effectively shields individuals from punitive taxation on transactions involving constitutional forms of currency.
Championed by Senator Tim Melson and Representative Jamie Kiel and backed by the Sound Money Defense League and Money Metals Exchange, SB 297 received bipartisan backing in the Alabama Legislature, reflecting widespread recognition of the importance of sound money principles at a time of blistering inflation.
Presenting before the Senate Finance and Taxation Education Committee, Sen. Melson emphasized the historical significance of gold and silver as constitutionally recognized forms of currency.
Melson stated, "Gold and silver have served as pillars of economic stability throughout history and are even mentioned by name in the U.S. Constitution. By eliminating taxes on transactions involving these precious metals, we affirm our commitment to upholding the principles of sound money and protecting the savings of our constituents."
It is widely known that “gains” realized from sales of precious metals don’t reflect genuine value appreciation, but rather reflect the continual depreciation of the U.S. Dollar. Despite this reality, the Internal Revenue Service takes the position that federal income taxes should be paid on such transactions. And most states find themselves taking this position by default.
Jp Cortez, executive director of the Sound Money Defense League, stressed the importance of Alabama's proactive stance in the face of inflationary pressures. He remarked, "Inflation erodes the purchasing power of individuals' savings and undermines economic and social stability. Alabama's decision to opt-out of this taxation scheme makes it the 13th state in the country to end this tax, with increasingly more states to follow.”
Nebraska passed their own version of this bill earlier this year. Arizona, Arkansas, and Utah approved similar measures in recent years. And Iowa, Georgia, Oklahoma, Missouri, and Kansas also considered income tax exemptions in 2024, with several approving the bill across multiple committees and chambers.
Alabama joins Utah, Wisconsin, Nebraska, and Kentucky as states to have enacted pro-sound money legislation into law so far in 2024.
Additionally, U.S. Congressman Alex Mooney (R-WV) re-introduced the Monetary Metals Tax Neutrality Act last week to eliminate the federal capital gains tax on all gold and silver coins and bullion.
Alabama's current ranking of 28th in the 2024 Sound Money Index is expected to rise, having passed other sound money bills in the last several years.
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