Utah – Taxability of Payments by Specie Legal Tender

SALT Report 1466 – Utah recently enacted legislation that amends certain sales and use tax provisions related to currency.  Under HB 157 “specie legal tender” which is defined as gold or silver coins issued by the United States, Congress, or a court of competent jurisdiction, will be exempt from the Pawnshop and Secondhand Merchandise Transaction Information Act.  HB 157 also provides guidance regarding the remittance of sales and use tax for transactions involving specie legal tender.
Payment in Specie Legal Tender
If a seller accepts payment by specie legal tender the seller must state in their books or records and on any invoice or bill of sale that is provided to the purchaser the following information:
  • The purchase price in specie legal tender and the legal tender the seller is required to remit to the state tax commission,
  • The amount of tax due in specie legal tender and the legal tender the seller is required to remit,
  • The tax rate applicable to the purchase, and
  • The date of the purchase

To determine the amount of tax due, the seller must use the most recent London fixing price for the specie legal tender the purchaser paid. Further, the Utah Legislature has authorized the state tax commission to determine the amount of tax due if the London fixing price is not available for a particular day.

Exemptions

An exemption is allowed for sales of currency or coins that constitute the legal tender of a state. Currently, sales of U.S. or foreign currency or coins only are exempt.  An exemption also is allowed for sales of the following that do not qualify as legal tender, but have a gold, silver or platinum content of at least 50%:

  • Ingots,
  • Bars, or
  • Medallions
For Further Information: