Buying Gold and Silver in Alabama

TAXES IN ALABAMA

All precious metals are subject to a sales tax in the state of Alabama, and this tax carries a basic rate of 4%. However, this should only be seen as a minimum, because certain regions add an additional rate, and in some areas this can be very high, as shown below:

  • Birmingham — 9%
  • Huntsville — 9%
  • Mobile — 10%
  • Montgomery — 10%

These tax rates apply not just to bullion coins and bars, but also to coins that carry a numismatic value, often seen more as collectibles than as simple bullion. This tax rate is typically applied prior to purchase, although that might not always be the case if you purchase online. However, in such cases, you are still expected to pay the sales tax.

Federal Capital Gains Tax

As well as a high sales tax, the Federal Capital Gains Tax applies in Alabama. This is set at a maximum of 28%, but the actual amount changes from person to person and is based on income and other factors. This tax is applied to all profits you make from the sale of precious metals. If you buy and hold, no taxes are due.

Tax Free Precious Metals

There is no way to purchase tax free precious metals in the state of Alabama, and it doesn’t look like it will change anytime soon. Some investors try to purchase their gold and silver outside of the state and have it shipped in, but they are still expected to pay the tax, so run the risk of penalties. Certain overseas storage companies may be a viable option for residents of Alabama looking to avoid taxes. This applies only if those purchases are retained in an overseas vault because, as soon as they are shipped into the country and into Alabama, they are subject to taxation, which can be very high.

Source: http://revenue.alabama.gov/salestax/Rules/810-6-2-.27.pdf

ABOUT ALABAMA

Alabama was built on agriculture, and has thrived in the last 60 years or so, prior to which it was one of the poorest states in the nation. Its largest city is Birmingham and the state capital is Montgomery. The Yellowhammer State is seen as a great place to buy gold and other precious metals, which comes from the fact that it has always had a close connection with mankind’s most prized precious metal. However, sizeable taxes on precious metals go some way to countering this.

Gold in Dixie

Alabama has a history rich in gold. There have been gold mines here for over 150 years, with prospecting, mining, panning and refining throughout that time, supplying investors and mints throughout the country. Alabama suffered through difficult times during and after the American Civil War, as did many other southern states. However, it owes thanks in no small part to the gold industry for being able to overcome those hardships and become a prosperous state. Today Alabama has large aerospace and manufacturing industries, producing everything from steel to minerals and livestock, all of which contribute to a GDP of over $170 billion. There is also a large army post, Redstone Arsenal, which is one of the largest employers in the state.

 

 

Note: GoldBroker cannot provide tax, legal, or other advice, so if you are not sure about the taxation to your personal circumstances, we recommend that you seek independent advice from a qualified professional.

 

All of these texts were accurate at the time of writing, but tax laws are constantly changing and it’s not easy to keep track of those changes. Because of this, we can not be held responsible for any false or out-of-date information.