Ducey signs tax cut on gold coin sales
PHOENIX (AP) — Gov. Doug Ducey’s final action on 33 remaining bills included signing a proposal exempting the sale of U.S. gold coins from state capital gains taxes despite vetoing two previous versions of the measure.
Ducey signed House Bill 2014 by Rep. Mark Finchem, which marked the lawmaker’s latest attempt to exempt gold coins from taxation. The Oro Valley Republican argues that taxing exchanges of “legal tender” like gold coins is a tax on money alone and is essentially a tax on inflation.
“As transmitted the bill provides for the tax-neutral treatment of a very limited class of collectibles, using narrowly defined language,” the governor said in a written statement. Ducey also said this year’s bill contains no new administrative mandates and should be easier to implement.
Similar efforts have earned two vetoes from Ducey and one from former Gov. Jan Brewer in recent years. Ducey previously cited unintended consequences, while Brewer cited potential lost state revenue and a special tax break for coin dealers.
But Finchem said he worked with staff from the governor’s office to amend the language of the bill and make sure it would get passed this time around.
The measure signed Monday defines legal tender as “a medium of exchange, including specie, that is authorized by the U.S. Constitution or Congress for the payment of debts, public charges, taxes and dues.” The bill defined specie as “coins having precious metal content.”
“In Arizona we are now setting a new course saying that doesn’t trigger a tax-pull event in our opinion,” Finchem said. “That’s because you’re exchanging one kind of currency for another.”
Finchem’s latest attempt passed the House on a 35-24 vote in February and the Senate on a 16-13 vote earlier this month, on the last day of the Arizona Legislature’s 2017 session.
Backers of the proposal brought in former congressman and presidential candidate Ron Paul to tout their effort at a Senate committee hearing in March.
“What you’re doing here, the way I understand it, is maybe we ought not to tax money,” Paul said during his testimony. “And I think that’s a good idea. I’d like to not tax a lot of things, but certainly it makes no sense to tax money.”