Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-248 - Sales of precious metal bullion and monetized bullion

Current through Register Vol. 24-14, July 15, 2024
Effective July 1, 1985, amounts derived from sales of precious
				metal bullion and monetized bullion as defined herein, are not subject to
				business and occupation tax under either the wholesaling or retailing
				classification or to retail sales tax. Statutory law expressly excludes such
				sales from the definitions of the terms, "wholesale sale," "sale at wholesale,"
				"retail sale," and "sale at retail."
The term, "precious metal bullion" is statutorily defined to
				mean any precious metal which has been put through a process of smelting or
				refining, including, but not limited to, gold, silver, platinum, rhodium, and
				palladium, and which is in such state or condition that its value depends upon
				its contents and not upon its form.
The term, "monetized bullion" means coin or other forms of
				money manufactured from gold, silver, or other metals and heretofore, now, or
				hereafter used as a medium of exchange under the laws of this state, the United
				States, or any foreign nation, but does not include coins or money sold to be
				manufactured into jewelry or works of art.
Thus, sales of processed or refined precious metal valued
				solely upon the content thereof, whatever its form, are not subject to tax in
				this state. This includes processed nuggets, bars, sticks, dust, and other
				processed forms of precious metal. For example, sales of gold or silver in raw,
				refined forms to dentists, laboratories, jewelers, and other persons, for their
				own consumption or for resale are not taxable. However, sales of precious metal
				which has been manufactured or further processed into any form which determines
				or adds to the value thereof are fully taxable. For example, sales of jewelry
				items, medallions, artworks, and other items, the value of which is dependent
				upon more than the mere content of precious metal therein, are subject to
				wholesaling or retailing business and occupation tax, whichever is applicable,
				and retail sales tax as appropriate.
Sales of metal money, in coined or other form, which is
				recognized as a medium of exchange in the financial marketplace, are not
				taxable. However, sales of coin or money, whether or not recognized as a medium
				of exchange, to jewelers or other persons for the purpose of manufacturing
				jewelry or artworks therefrom are fully taxable. For example, sales of coins
				for necklaces or to be used as buttons or in paintings or painting frames,
				etc., are taxable.
It is presumed that all sales of coin and metal money are
				entitled to tax exemption: Provided, That in order to be exempt of tax persons
				who knowingly sell such things to buyers who are regularly engaged in the
				business of manufacturing jewelry or works of art must take a written, signed,
				and dated statement from such buyers that the coins or metal money are not
				being purchased for use in manufacturing jewelry or works of art. Artistic or
				cultural organizations which purchase such things are exempt of retail sales
				tax as provided in WAC
				458-20-249.
The tax exclusions explained herein apply equally to sales of
				precious metal bullion or monetized bullion transferred through documents of
				ownership, certificates, confirmation slips, or other indicia of
				ownership.
Taxable Commissions
Amounts received as commissions upon sales of precious metals
				by dealers, brokers, and other selling and/or buying agents who sell or buy
				precious metal bullion or monetized bullion for the accounts of customers are
				subject to the service and other activities classification of business and
				occupation tax. The amount of any shared commission or fee paid to other
				dealers or commissioned agents associated in such transactions are deductible
				from the measure of this tax. However, no deduction is allowed for any of the
				dealer's or commissioned agent's own costs of doing business, including
				salaries or commissions paid to their own salespersons or other employees.
				Similarly, persons who receive any part of shared commissions derived from
				having been associated in transactions for the purchase or sale of precious
				metal or monetized bullion for the account of others, are themselves subject to
				service business tax measured by such amounts received.
Use Tax
The use tax does not apply upon the use of precious metal
				bullion or monetized bullion in this state under such circumstances that the
				sale of such bullion to the user would not be taxable if made in this state as
				explained earlier herein. In all other cases the use tax applies upon the first
				use by a consumer of precious metals in this state if retail sales tax has not
				been paid. See WAC
				458-20-178.
Statutory Authority:
				  RCW
				  82.32.300. 86-09-016 (Order ET 86-6), §
				  458-20-248, filed 4/9/86.