By Matthew Cortez
As inflation cuts into Mainersâ savings, individuals and businesses are actively seeking ways to protect their hard-earned money. LD 372, sponsored by Sen. Marianne Moore (R-Washington) and Rep. Laurel Libby (R-Auburn), and supported by the Sound Money Defense League and Money Metals Exchange, would end sales tax on purchases of gold and silver across the state.
The problem of the steady erosion in the value of the Federal Reserve note, i.e. the dollar, is rooted in irresponsible federal monetary and fiscal policies. Maine doesnât have to stand by as the effects of federal policies harm Mainers statewide. Hereâs why Maine should be the next state to enact sound money legislation: Gold and silver are primarily held for resale, similar to other traditional financial investments.
Maine doesnât tax the purchase of other assets held for resale, but its citizens may still have to pay a tax on gold and silver. So if a taxpayer wants to buy everything from real estate to ETFs to tech stocks to crypto, the State of Maine does not charge a sales tax. But if that taxpayer wants to buy gold and silver, the State will charge sales tax on the purchase of the asset (Maine will also charge a capital gains tax on the sale of the asset â this is double taxation).
Furthermore, wealthy Mainers have plenty of tax-advantaged options to invest. Those investing in physical precious metals tend to be citizens of more humble means. The exchange of one dollar for four quarters is a nontaxable event.
Article I Section 10 of the U.S. Constitution says that âNo State shallâŠmake any Thing but gold and silver Coin a Tender in Payment of Debts.â Exchanging dollars for the only form of money mentioned in the Constitution should not be taxed.
JP Cortez, executive director of the Sound Money Defense League, has traveled to Augusta multiple times to support the effort, explaining to Maine lawmakers the historic role that gold and silver have played in the U.S.
As of this writing, 46 states have already fully or partially eliminated the state sales tax on the purchase of precious metals. Kentucky, New Jersey, Wisconsin, Mississippi, and Virginia have enacted similar laws since 2022. The Maine House failed to approve a measure introduced by former state Sen. Eric Brakey in 2023 by a 71-72 vote.
A sales tax on gold, whose price continues to hit all-time highs seemingly daily, can represent a significant additional cost, making it less accessible for those who are economically vulnerable. Taxing purchases of gold and silver is also an inefficient form of revenue collection; a Michigan study suggests that any sales tax proceeds collected by the state may be outweighed by the revenue lost from the businesses, conventions, or economic activity being driven out to other states.
Mainers deserve an alternative to perpetually eroding money. Interested citizens can find contact information for key members of the state legislature here.
Maine lawmakers should pass LD 372 to should join the national sound money movement by picking up where previous efforts have left off, and finally ending sales tax on purchases of constitutional money.
Matthew Cortez is a policy assistant for the Sound Money Defense League, a non-partisan public policy group working to restore sound money at the state and federal level since 2014.
