Bill S7875 Could Restrict Individual Investor Benefits
In early May 2025, New York bullion buyers celebrated a major win as state lawmakers preserved the existing sales tax exemption on precious metals purchases over $1,000. But just days later, a new threat has emerged. Senate Bill S7875 - introduced by Senator Andrew Gounardes on May 13 - aims to dramatically narrow who can benefit from the exemption, potentially shutting out individual investors, collectors, and small-scale buyers across the state.
Background: Recent Victory on S3009
Under New York Tax Law §1115(a)(27), investment-grade gold, silver, platinum, and palladium are exempt from state and local sales tax when sold for their metal content and when transactions exceed $1,000. This exemption helps keep New York competitive with over 40 other states offering similar relief and has long been a pillar of the state’s precious metals economy.
Just this month, on May 9, Governor Kathy Hochul signed Senate Bill S3009 into law without repealing the exemption - despite months of speculation that it would be eliminated during budget negotiations. That outcome preserved critical benefits for New Yorkers buying bullion through local dealers.
New Bill Could Cut Out Retail Investors
While the full repeal threat was temporarily defeated, Senate Bill S7875 proposes a more targeted restriction. The bill, now with the Senate Budget and Revenue Committee, seeks to limit the sales tax exemption to only government agencies and certain institutional buyers - effectively removing the exemption for the average New Yorker investing in bullion.
If enacted, this change would mean most individuals - retirees, working families, and even local collectors - would once again face sales tax rates up to 8.875% on bullion transactions.
What’s at Stake
Eliminating the exemption for most retail buyers could have broad financial and economic consequences:
???? Higher Costs for Buyers: Precious metals investors would face additional taxes on already expensive assets.
???? Disadvantage for NY Dealers: Local businesses like NYC Bullion may lose customers to out-of-state competitors not required to charge tax.
???? Reduced Access for Small Investors: Families and retirees using gold and silver to hedge against inflation would be hardest hit.
???? Loss of Local Revenue: A drop in local purchases could lead to long-term losses in related revenue and employment.
Industry Experts Call for Advocacy
David Crenshaw, Executive Director of the National Coin & Bullion Association (NCBA), called the proposed bill “a step backward” for New York’s economy. He stressed that the exemption supports small business growth and protects access to financial tools that offer security in times of economic uncertainty.
In contrast, critics of the exemption claim it benefits the wealthy and costs the state needed revenue - an argument the NCBA and many dealers reject, citing the real-world impact on everyday investors.
Why It Matters Now More Than Ever
With ongoing inflation concerns and volatility in other asset classes, more New Yorkers are turning to precious metals as a safeguard. Bullion remains a trusted option for building long-term financial resilience. Removing tax protections would diminish its value as a strategic investment vehicle.
Stay Alert and Stay Engaged
Although the recent exemption victory was encouraging, Senate Bill S7875 proves that the debate is far from over. At NYC Bullion, we urge our clients and fellow New Yorkers to stay informed about legislative developments affecting their access to tax-free precious metals. Contact your state representatives and support organizations working to preserve these protections