Are sales of gold, silver, precious-metal coins, and bullion by banks, coin dealers, and pawn shops subject to Kansas sales tax?

Plain-English summary

Kansas answered a question that had been put to the Department: are sales of gold, silver, precious-metal coins, and bullion by banks, savings and loans, and similar institutions subject to Kansas sales tax? The Department's answer was yes.

Under K.S.A. 79-3603(a), Kansas taxes the gross receipts from retail sales of tangible personal property in the state. The notice listed Canadian Maple Leafs, American Eagles, South African Krugerrands, and gold and silver bullion as examples — an illustrative, not exhaustive, list — of items taxable when sold to the ultimate user or consumer.

Crucially, the seller's line of business does not matter. Pawn shops, coin dealers, banks, and savings and loans that sell these items to final consumers are all retailers under the Sales Tax Act. They must register with the Department of Revenue and charge tax on the total selling price.

The Department noted that some financial institutions were not registered or collecting the tax, warned that selling without collecting and remitting is a violation of Kansas law, and told unregistered sellers to register.

What this means for you

If you sold coins or bullion in 1987 Kansas — whether that was your main business or a sideline at a bank or pawn shop — you were a retailer for sales-tax purposes and had to register and collect tax on those sales. Note that Kansas tax treatment of coins and bullion has changed over the years, so this notice describes the rule as it stood in 1987, not necessarily current law.

Common questions

Q: Which items did the notice name as taxable?
A: Canadian Maple Leafs, American Eagles, South African Krugerrands, and gold and silver bullion — offered as examples, not a complete list.

Q: Does it matter whether selling coins is my main business?
A: No. The notice states the seller's principal line of business is not determinative — pawn shops, coin dealers, banks, and savings and loans are all retailers when they sell these items to consumers.

Q: What did an unregistered seller have to do?
A: Register as a Kansas retailer and begin collecting and remitting sales tax; selling without doing so was described as a violation of Kansas law.

Citations and references

• K.S.A. 79-3603(a) — imposes Kansas tax on gross receipts from retail sales of tangible personal property.

Subject

Sales of Gold, Silver and Precious Metals

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 87-0401

Original ruling text

Notice
Notice Number: Gold, Silver, and Precious Metals
Tax Type: Kansas Retailers' Sales Tax
Brief Description: Sales of Gold, Silver and Precious Metals
Keywords:
Effective Date: 04/01/1987

Body:
REVENUE NOTICE

TO: Banks, Savings and Loans, and other Similar Institutions

FROM: Kansas Department of Revenue, Sales & Excise Tax Bureau

SUBJECT: Sales of Gold, Silver, Precious Metals Coins and Other Similar Items

DATE: April 1, 1987

Advice has been requested as to whether sales of gold, silver, precious metal coins and other similar property by banks, savings and
loans, and other similar institutions are subject to Kansas sales tax. The department has determined that such sales are properly
subject to the Kansas sales tax.

K.S.A. 79-3603(a) imposes Kansas tax upon the gross receipts received from the sale of tangible personal property at retail within
this state. Items such as Canadian Maple Leafs, American Eagles, South African Krugerrands, gold and silver bullion, etc. when sold
to the ultimate user or consumer are properly subject to Kansas sales tax. This listing should not be considered a complete or
exclusive list, but is merely illustrative of items which, when sold to the final user or consumer, are subject to Kansas sales tax.

The principal line of business of the seller is not determinative of whether sales tax is due. Pawn shops, coin dealers, banks, savings
and loans, and other organizations or businesses which are selling these types of items to the final user or consumer are retailers
under the Sales Tax Act, and must register with the Department of Revenue. In turn, Kansas sales tax is to be imposed on the total
selling price of these types of items.

It has come to the department's attention that some financial institutions may not be registered and collecting Kansas sales tax on
sales of gold, silver, precious metal coins and other similar items. Please be advised that selling such items without collecting and
remitting Kansas sales tax is a violation of Kansas law. Therefore, if your institution is not registered, collecting and remitting
Kansas sales tax on transactions as outlined herein, you must register as a Kansas retailer. Registration applications may be obtained
and inquires directed to:

Applications Information

Kansas Department of Revenue Kansas Department of Revenue
Registration Section, 5th Floor Sales & Excise Tax Bureau, 3rd Floor
Robert B. Docking State Office Building Robert B. Docking State Office Building
Topeka, Kansas 66625-0001 Topeka, Kansas 66625-0001
(913) 296-3169 (913) 296-2461

Date Composed: 10/06/1997 Date Modified: 10/10/2001

                                                    Return to KSA Listing