What is going on in the state of Texas?

Desert Moon · November 1, 2019 11:53AM

Proposition 9 on the ballot:

Proposition 9 (HJR 95)

This proposition would allow lawmakers to create a property tax exemption for precious metals kept in a depository in Texas.

The dictionary defines precious metals as “any of the less common and highly valuable metals (as gold, silver and the platinum metals),” and there actually is a state-run vault where you can store your precious metals, located right here in Central Texas.

According to LWV, arguments for this prop include that other states don't tax precious metals and that this prop would increase the chances that the Texas depository could join COMEX, while arguments against the prop include that Texas counties don't enforce the property tax on precious metals, so the prop is unnecessary, and that the prop gives preference for precious metals over other investment choices by offering a tax break.

Here’s how you’ll see Prop 9 worded on your ballot: "The constitutional amendment authorizing the legislature to exempt from ad valorem taxation precious metal held in a precious metal depository located in this state."

WHAT THE HECK? WE ALREADY HAVE A STATE EXEMPTION DON'T WE? IS THIS JUST TO FORCE FOLKS TO PUT THE METALS IN THE STATE DEPOSITORY OTHERWISE NOT GET THE EXEMPTION? THIS SEEMS NUTS AND WHAT IS GOING ON?

ANYONE HAVE IDEAS ABOUT THIS?

BEST, SH

ricko · November 1, 2019 11:56AM

Sounds strange to me.... I would need to study the full documentation...and of course, that may not divulge the whole story behind it. Do not ask politicians...see if you can get an economics expert to interpret it for you. Cheers, RickO

BillDugan1959 · November 1, 2019 11:57AM

Rich men playing big money games that you and I won't be invited to.

No need to worry about your PM stack.

jmlanzaf · November 1, 2019 12:15PM

@spacehayduke said:
Proposition 9 on the ballot:

Proposition 9 (HJR 95)

This proposition would allow lawmakers to create a property tax exemption for precious metals kept in a depository in Texas.

The dictionary defines precious metals as “any of the less common and highly valuable metals (as gold, silver and the platinum metals),” and there actually is a state-run vault where you can store your precious metals, located right here in Central Texas.

According to LWV, arguments for this prop include that other states don't tax precious metals and that this prop would increase the chances that the Texas depository could join COMEX, while arguments against the prop include that Texas counties don't enforce the property tax on precious metals, so the prop is unnecessary, and that the prop gives preference for precious metals over other investment choices by offering a tax break.

Here’s how you’ll see Prop 9 worded on your ballot: "The constitutional amendment authorizing the legislature to exempt from ad valorem taxation precious metal held in a precious metal depository located in this state."

WHAT THE HECK? WE ALREADY HAVE A STATE EXEMPTION DON'T WE? IS THIS JUST TO FORCE FOLKS TO PUT THE METALS IN THE STATE DEPOSITORY OTHERWISE NOT GET THE EXEMPTION? THIS SEEMS NUTS AND WHAT IS GOING ON?

ANYONE HAVE IDEAS ABOUT THIS?

BEST, SH

Proposition 9 has nothing to do with private ownership of bullion. It strictly relates (as I read it) to the taxability of depositories.

Smudge · November 1, 2019 12:30PM

My SDB is a precious metals depository. Don't live in Texas though.

jmlanzaf · November 1, 2019 12:36PM

@Smudge said:
My SDB is a precious metals depository. Don't live in Texas though.

@Smudge said:
My SDB is a precious metals depository. Don't live in Texas though.

Is it, by the legal definition?

It seems to me the issue is that a Depository being run in Texas could be/would be subject to property taxes based on the value of the holdings. So, if you've got a $1 million warehouse with $1 billion in bullion, that's a $1 billion taxable property value. Prop 9 seeks to exempt the bullion so you only are assessed on the $1 million property.

At least that was my take from the postings of the defenders of the prop.

CaptHenway · November 1, 2019 1:33PM

Perhaps some people in the Precious Metals Forum can help you. I cannot.

blitzdude · November 1, 2019 2:28PM

All I know is if you don't hold it you don't own it. Carry on!!

Namvet69 · November 1, 2019 2:34PM

Why does our government need to know what bullion anyone has anywhere? Peace Roy

derryb · November 1, 2019 2:47PM

Just a little self serving stimulus for their state run depository

Pricing and Fees

Insider2 · November 1, 2019 2:57PM

@Namvet69 said:
Why does our government need to know what bullion anyone has anywhere? Peace Roy

This cannot be answered without breaking the rules. ;( That's very unfortunate as we all should wish to be informed citizens. Ditto with what is going on in Texas. If you do a little research, the answer is easily found.

Hemispherical · November 1, 2019 3:37PM

Since TX does not have a personal income tax then revenue mist be generated from other means.

-From businesses revenue

-From business owned land and inventory values

-From personally owned land and homes values

Etc...

Appears this exemption would allow depositories to not include the bullion stored within its confines as a business asset and therefore not taxed.

This will open the doorway to allow such business to store great wealth from across the globe with worrying about asset taxes.

More stored, more fees, more money generated within the state to make more money.

IMO

———————

@derryb said:
Just a little self serving stimulus for their state run depository

Pricing and Fees

Thanks @derryb for the links. This is where the big boys/girls store the big (or many multiplies) ingots/bars that would not fit in a bank’s SDB. Or, when one runs out of space on the ranch/farm land to bury them. B:D

derryb · November 1, 2019 11:24PM

@jmlanzaf said:

It seems to me the issue is that a Depository being run in Texas could be/would be subject to property taxes based on the value of the holdings. So, if you've got a $1 million warehouse with $1 billion in bullion, that's a $1 billion taxable property value. Prop 9 seeks to exempt the bullion so you only are assessed on the $1 million property.

So if a bank pays property tax on it's physical vault (it's value is included in the appraisal of the building) does the cash stored in it get taxed as property as well? I don't think so. Why should a depository be treated any different.

jmlanzaf · November 2, 2019 12:06AM

@derryb said:

@jmlanzaf said:

It seems to me the issue is that a Depository being run in Texas could be/would be subject to property taxes based on the value of the holdings. So, if you've got a $1 million warehouse with $1 billion in bullion, that's a $1 billion taxable property value. Prop 9 seeks to exempt the bullion so you only are assessed on the $1 million property.

So if a bank pays property tax on it's physical vault (it's value is included in the appraisal of the building) does the cash stored in it get taxed as property as well? I don't think so. Why should a depository be treated any different.

Ask the State of Texas. But that's what the Prop reads:

https://ballotpedia.org/Texas_Proposition_9,Precious_Metals_in_Depositories_Exempt_from_Property_Tax_Amendment(2019)

Exbrit · November 2, 2019 4:00AM

Wasn't the orgin of all this based upon a beef with where and how, including being taxed - without benefit to Texas, on bullion being stored outside of Texas? I remember an article discussing the dispute, but I cannot put my fingers on it. My memory is really foggy on this.

7Jaguars · November 2, 2019 6:43AM

Look, if it’s confused it must be Texas LOL

Grandmother would have said if it seems crazy/illogical, then that is because it is.

sellitstore · November 2, 2019 7:06AM

The problem can be found in this statement:

"Other states do not tax precious metals, so creating this exemption would allow Texas depositories to be more competitive."

Real Estate taxes are common to all states but taxes on other wealth (cash, precious metals, coins, cars and houses) are rare. A "Wealth Tax" is what "liberal" Elizabeth Warren is proposing but only on the VERY rich. Most states will tax the GAIN on a sale of precious metals but there is no tax consideration until a sale occurs. Texas taxes citizens just to HOLD precious metals? What?

So Texas believes in taxing your precious metals for just holding them outside a state depository, while other states don't. I'll bet that fact will surprise a lot of proud Texans. It seems that this would encourage hiding of bullion from the State of Texas in private stashes, or deposit in a state depository. What do you think most Texans will choose?

fiftysevener · November 2, 2019 7:24AM

Believe it or not some people don't want to hold their own bullion. Sounds funny but I'll bet most don't live in Texas. I know a few Texans and while they are very resistant to political change I think they just want straight answers. Sounds like lobbyists have influenced policy makers here.

BAJJERFAN · November 2, 2019 7:44AM

@spacehayduke said:
Proposition 9 on the ballot:

Proposition 9 (HJR 95)

This proposition would allow lawmakers to create a property tax exemption for precious metals kept in a depository in Texas.

The dictionary defines precious metals as “any of the less common and highly valuable metals (as gold, silver and the platinum metals),” and there actually is a state-run vault where you can store your precious metals, located right here in Central Texas.

According to LWV, arguments for this prop include that other states don't tax precious metals and that this prop would increase the chances that the Texas depository could join COMEX, while arguments against the prop include that Texas counties don't enforce the property tax on precious metals, so the prop is unnecessary, and that the prop gives preference for precious metals over other investment choices by offering a tax break.

Here’s how you’ll see Prop 9 worded on your ballot: "The constitutional amendment authorizing the legislature to exempt from ad valorem taxation precious metal held in a precious metal depository located in this state."

WHAT THE HECK? WE ALREADY HAVE A STATE EXEMPTION DON'T WE? IS THIS JUST TO FORCE FOLKS TO PUT THE METALS IN THE STATE DEPOSITORY OTHERWISE NOT GET THE EXEMPTION? THIS SEEMS NUTS AND WHAT IS GOING ON?

ANYONE HAVE IDEAS ABOUT THIS?

BEST, SH

Well there apparently isn't an exemption. Also the tax isn't being enforced so the law would ensure that it won't be taxed is how I see it.

Also would it apply only to PMs owned by Texas residents?

CCGGG · November 2, 2019 9:29AM

@fiftysevener said:
Believe it or not some people don't want to hold their own bullion. Sounds funny but I'll bet most don't live in Texas.

As a native Texan, it doesn't sound funny to me. I don't want my bullion anywhere that I don't fully control nor anywhere the government (or anyone else for that matter) knows what I have. It's none of their "&^(%" business.

My Au and Ag precious metals are protected by other precious metals/elements such as Pb covered by a thin layer Cu housed in a round cylinder made of Fe and a little C.

fiftysevener · November 2, 2019 9:32AM

@CCGGG said:

@fiftysevener said:
Believe it or not some people don't want to hold their own bullion. Sounds funny but I'll bet most don't live in Texas.

As a native Texan, it doesn't sound funny to me. I don't want my bullion anywhere that I don't fully control nor anywhere the government (or anyone else for that matter) knows what I have. It's none of their "&^(%" business.

My Au and Ag is protected by a Pb core covered by a thin layer Cu.

What caliber ?

CCGGG · November 2, 2019 9:48AM

@fiftysevener said:

@CCGGG said:

@fiftysevener said:
Believe it or not some people don't want to hold their own bullion. Sounds funny but I'll bet most don't live in Texas.

As a native Texan, it doesn't sound funny to me. I don't want my bullion anywhere that I don't fully control nor anywhere the government (or anyone else for that matter) knows what I have. It's none of their "&^(%" business.

My Au and Ag is protected by a Pb core covered by a thin layer Cu.

What caliber ?

All of them... Well almost everything from 22 to 458.

Cougar1978 · November 2, 2019 1:09PM

I don’t like the idea of someone else having control or storing my PM. While another poster mentions financial privacy (another consideration) - Try and access that in a disaster or crises.

BStrauss3 · November 2, 2019 4:07PM

Texas doesn't have an ad Valorem tax. This is just belt & suspenders to give the bullion depository something to brag about.

Martin · November 2, 2019 9:12PM

I seem to remember that a Texas college I think Texas A&M around 2008 or so built a vault in Texas and moved around $500,000,000 from NY to Texas. Seems like I read that on this or the PM forum Texas A&M might have got tired of paying taxes on it and did some lobbying?

Martin

Paradisefound · November 2, 2019 11:34PM

Move to another state?

BStrauss3 · November 3, 2019 8:43AM

@Martin said:
I seem to remember that a Texas college I think Texas A&M around 2008 or so built a vault in Texas and moved around $500,000,000 from NY to Texas. Seems like I read that on this or the PM forum Texas A&M might have got tired of paying taxes on it and did some lobbying?

Martin

A&M is a state college. Everything they do is exempt.

https://www.texasbulliondepository.gov/

Note that the stated purpose of repatriating the gold cannot be accomplished due to rules that were in place when the whole boondoggle was proposed...

The constitutional change "benefits" only the Texas Bullion Depository (note the .gov: https://www.texasbulliondepository.gov/), a state agency.

So, do you really trust the state to protect you from the state? Oh, and they've outsourced the whole thing to a private company and just provide oversight...

https://www.lonestartangibleassets.com/portfolio

BAJJERFAN · November 3, 2019 8:55AM

@jmlanzaf said:

@Smudge said:
My SDB is a precious metals depository. Don't live in Texas though.

@Smudge said:
My SDB is a precious metals depository. Don't live in Texas though.

Is it, by the legal definition?

It seems to me the issue is that a Depository being run in Texas could be/would be subject to property taxes based on the value of the holdings. So, if you've got a $1 million warehouse with $1 billion in bullion, that's a $1 billion taxable property value. Prop 9 seeks to exempt the bullion so you only are assessed on the $1 million property.

At least that was my take from the postings of the defenders of the prop.

IF the value of the bullion in the depository WAS taxable that would certainly reduce if not eliminate the likelihood that a non-resident person or business would store their PMs there.

Tomthecoinguy · November 4, 2019 8:22PM

So what are the Texas tax consequences of having your PMs stored at a depository outside of Texas? If the new law would provide for the a Tax advantage for Texas depositories over out of state, the new law might be unconstitutional.

The "Dormant Commerce Clause" means that a state cannot pass a law that creates an advantage for their state's products.

Hydrant · November 4, 2019 8:58PM

@CCGGG said:

@fiftysevener said:
Believe it or not some people don't want to hold their own bullion. Sounds funny but I'll bet most don't live in Texas.

As a native Texan, it doesn't sound funny to me. I don't want my bullion anywhere that I don't fully control nor anywhere the government (or anyone else for that matter) knows what I have. It's none of their "&^(%" business.

My Au and Ag precious metals are protected by other precious metals/elements such as Pb covered by a thin layer Cu housed in a round cylinder made of Fe and a little C.

Hey,CCGGG, You sound just like my late mother-in-law. She was born in Texas too. Down around Saltillo. Nothing sounded funny to her.....especially me. REMEMBER THE ALAMO!!!!!

What is going on in the state of Texas?

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