Money Metals Exchange: Precious Metals Taxation Constitutional Challenge
Money Metals Exchange (the Idaho-based precious metals dealer and exchange) has been involved in litigation related to state taxation of precious metals transactions. The company, as an industry participant and advocacy organization, has supported constitutional challenges to state sales taxes on gold and silver coins and bullion. The legal theory: Article I, Section 10 of the U.S. Constitution declares gold and silver coin to be legal tender, and states that impose sales taxes specifically on constitutional legal tender may be treating constitutionally-designated money as a commodity in a way that conflicts with federal currency law.
State sales tax exemptions for precious metals have been a state legislative priority for gold and silver advocates. As of 2026, approximately 40 states have enacted full or partial exemptions from sales tax for gold and silver bullion transactions, with active advocacy in remaining states. Money Metals Exchange has been active in supporting legislative exemptions and challenging remaining state sales taxes through litigation that tests the constitutional limits of state taxation of precious metals transactions.
Constitutional Money and Legal Tender Legal Framework
The Article I, Section 10 constitutional prohibition on states making anything other than gold and silver coin legal tender has been interpreted by courts as limiting state power to impose legal burdens specifically on constitutional money. However, courts have generally upheld state sales taxes on precious metals as taxes on commercial transactions rather than regulations of money itself. The constitutional challenge theory has had limited but growing success as courts in some jurisdictions have been more receptive to the economic liberty arguments underlying the precious metals tax exemption movement. Related: government taxation constitutional challenges.
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Money Metals Exchange Lawsuit: Your Legal Rights Explained: Frequently Asked Questions
Answers to the most common questions about this case and your legal options.
Why does Money Metals Exchange oppose precious metals sales taxes?
Money Metals Exchange argues that taxing gold and silver coin (constitutional legal tender) with sales taxes impedes their use as currency and conflicts with constitutional provisions. The practical argument is that sales taxes make using precious metals as money economically uncompetitive with fiat currency, effectively preventing their constitutional function.
Is gold and silver taxed when you sell it?
Sales of precious metals are generally subject to federal capital gains tax on the profit (gold is a collectible, taxed at a maximum 28% long-term rate). State sales tax treatment varies: approximately 40 states now exempt gold and silver bullion from sales tax. Some states exempt coins but not bullion; others have minimum threshold exemptions. Check your specific state's current law.
What is the constitutional argument against taxing gold?
The argument proceeds: Article I, Section 10 designates gold and silver coin as the only legal tender states may accept; taxing gold and silver transactions specifically (while not taxing fiat currency transactions) discriminates against constitutional money; and the Supremacy Clause means federal constitutional designation of gold as legal tender preempts state taxes that burden its use as money.
Has the constitutional challenge to precious metals taxes succeeded?
Results have been mixed. Some state courts have been receptive to the argument; others have upheld precious metals taxes as lawful commercial transaction taxes. Legislative exemption has been more successful than litigation, the state-by-state legislative campaign has achieved exemptions in far more states than court victories have.
Which states still tax precious metals?
A small number of states including New Jersey, Vermont, Maine, Kentucky, and Tennessee still impose sales tax on some precious metals transactions as of 2026. State laws change; check with the Money Metals Exchange or a tax advisor for the most current state-by-state analysis before making significant precious metals purchases.
Legal Disclaimer
This article is for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Lawsuit eligibility, settlement amounts, and case status are subject to change as litigation develops. Always consult a licensed attorney in your jurisdiction before making legal decisions. LawsuitWatch is an independent journalism publication and is not a law firm. LawsuitWatch may receive referral compensation from affiliated legal service providers, which does not influence editorial content.