FRANKFORT, Ky. (March 17, 2025) – On Friday, the Kentucky House and Senate gave final approval to a bill that would effectively reinstate a sales tax exemption on gold and silver that Gov. Andy Beshear ignored.
In 2024, the Kentucky legislature repealed the sales tax on gold and silver bullion in an omnibus revenue bill. Gov. Beshear signed the bill, but line-item vetoed the tax repeal on bullion. With the backing of Attorney General Russell Coleman, the legislature deemed the veto unconstitutional and ordered the law to be enrolled as statute. Beshear rejected the AGโs opinion and directed the Department of Revenue to collect the sales tax despite the law technically being on the books.
Rep. TJ Roberts, along with a large coalition of cosponsors, filed House Bill 2 (HB2) to end collection of the tax and to provide a legal process for those charged the tax after its repeal to sue in state circuit court for a refund with interest, along with damages. This would set the stage for the courts to officially overturn the governor’s line-item veto.
“Weโre not just stopping this overreach; weโre ensuring refunds, interest, and damages for anyone improperly taxed,” Roberts wrote in a post on X.
The House initially passed HB2 by a 76-17 vote. On March 12, the Senate passed the measure with an amendment that would provide a tax filing extension for those impacted by recent floods by a 35-5 vote. The House rejected the Senate amendments and on March 14, the Senate receded from the amendment by a 30-6 vote, sending the bill to Gov. Beshear’s desk.
IMPACT
Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.
Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35-cent tax. Silly, right? After all, you were only exchanging one form of money for another. But thatโs essentially what a sales tax on gold and silver bullion does. By eliminating this tax on the exchange of gold and silver, state treat gold and silver specie more like money. This supports the use of gold and silver in transactions and breaks down the Fedโs monopoly on money.
โCitizens of Kentucky, or of any state in the United States, for that matter, shouldnโt be taxed for trying to use, buy, or transact in honest, sound money,” Roberts said in an interview with theย Sound Money Defense League.
โWe ought not to tax money โ and thatโs a good idea. It makes no sense to tax money,โ former U.S.ย Rep. Ron Paul said during testimony in support of an Arizona billย that repealed capital gains taxes on gold and silver in that state.ย โPaper is not money, itโs fraud,โย he continued.
BACKGROUND
The United States Constitution states in Article I, Section 10, โNo State shallโฆmake any Thing but gold and silver Coin a Tender in Payment of Debts.โย Currently, all debts and taxes in most states are either paid with Federal Reserve Notes (dollars) which were authorized as legal tender by Congress, or with coins issued by the U.S. Treasury โ very few of which have gold or silver in them.
The Federal Reserve destroys this constitutional monetary system by creating a monopoly based on its fiat paper currency. Without the backing of gold or silver, the central bank can easily create money out of thin air.
This not only devalues your purchasing power over time; it also allows the federal government to borrow and spend far beyond what would be possible in a sound money system. Without the Fed, the U.S. government wouldnโt be able to maintain all of its unconstitutional wars and programs. The Federal Reserve isย the engine that drives the most powerful government in the history of the world.
State laws that facilitate and encourage the use of sound money create a playing field where people can push back against the Fedโs monetary malfeasance. Ultimately, it couldย create a scenarioย where people can drive out the โbadโ fiat money with โgoodโ sound money.
WHATโS NEXT
Gov. Beshear will have 10 days (excluding Sundays) from the data the HB2 is transmitted to his office to sign or veto the bill. If he takes no action, it will become law without his signature. Roberts said he expects Beshear to veto the measure.
“Passing the Senate is a huge win, but the fight isnโt over yet! I expect a veto, but Iโm committed to rallying the votes to override it and make this law a reality. You deserve a stronger, freer Kentucky, and I wonโt stop until we get there.”
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