IN HB1046 | 2015 | Regular Session

From the Fiscal Impact Statement, page 2: " ... the U.S. Mint publishes data on its sales of bullion and numismatic coins. In FFY 2013, it sold $3.2 B in gold and silver bullion and $512.4 M in numismatic products. The average total sales in FFY 2009 through FFY 2013 was about $3.3 B. A portion of U.S. Mint sales is allocated to Indiana based on the state’s share of national personal income." At least on page 1 they said: "There is currently no reliable data source for these purchases by Indiana residents." This study would have been better stated: "We don't know what to do." Instead, they made up a number through a faulty process; $4.1 million cost annually. This analysis should have never been attached to this bill. When the State of Michigan faced this same decision in 1999, the economic impact of the lost tax revenue was estimated to be $300,000. Instead, in the first 2 1/1 years, it brought in $1.7 million in new revenue. (Just a $2 million mistake!) From 1999-2011, 150 new coin businesses began in Michigan and 600 new jobs were added. (1) Michigan thought they were doing a good thing in 1994 when they increased their sales tax from 4% to 6%. "Several Michigan coin dealers moved out of the state to continue their business in states that had no sales or use taxes on the retails sales of precious metals bullion and rare coins." (2) Then, in 1999 they exempted bullion from sales tax and saw the growth in their bullion business. When Ohio repealed their tax exemption on bullion in 2005, within six months of the repeal, 100 Ohio coin dealerships had closed or laid-off staff. Since the repeal, no major coin conventions have returned to Ohio ... a costly mistake! (3) The Industry Council for Tangible Assets (ICTA) reports that coin conventions could bring $7 million to $15 million per event to major cities like Indianapolis, Fort Wayne and South Bend. They will not bring these conventions to states which tax the sale of bullion. (4) Indiana is missing out on significant economic gains because we are in a minority of states which continue to tax bullion. More than 30 states have tax-favored treatment of bullion purchases. When I became interested in this in 2013, I informally surveyed 32 precious metals bullion buyers. With Hoosier purchases exceeding $1.2 million, only 9% of these purchases were done within the state. This means, in this example, the State of Indiana taxed 9% of these purchases while missing out on the tax revenue from 91% of this business. This isn't rocket science. In which state would you buy a 1 oz. gold coin, at these prices: Indiana: $1,370 Michigan: $1,280 Illinois: $1,280 Ohio: $1,382 This is simple economics ... facts and common sense the Fiscal Impact Statement missed. I would encourage state representatives to recognize how this Fiscal Impact Statement was calculated and ask what purpose it serves in guiding votes related to House Bill 1046. A vote based on this fiscal study would be a costly financial mistake. Brad Skiles Founder of Hoosiers for Tax-Free Bullion Footnotes 1) Michigan Study, 2012 Liberty Coin Service letters, by Patrick A. Heller, CPA, March 16, 2012 and March 21, 2012 2) March 16, 2012 Liberty Coin Service letter, by Patrick A. Heller, CPA 3) February 25, 2013 ICTA letter to Texas Representative David Simpson 4) November 13, 2013 ICTA letter to Ms. Rita Graft, from Diane Piret, Industry Affairs Director