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Senate finance committee rejects bullion capital-gains exemption after technical amendment
Summary
The Senate Finance and Taxation Committee on Monday recommended a do‑not‑pass on House Bill 13‑79, which would have changed North Dakota’s tax treatment of capital gains on gold and silver bullion, after adopting a technical amendment and debate over oversight and who would benefit.
The Senate Finance and Taxation Committee on Monday closed the hearing and recommended a do‑not‑pass on House Bill 13‑79, a proposal to change how North Dakota taxes capital gains on gold and silver bullion.
Representative Johnston, sponsor of the bill, told the committee HB 13‑79 would let North Dakota follow 13 other states that have changed their rules for bullion and that the bill “completely back[s] out gains and losses, making the bill completely tax neutral.” He said the bill is intended to make bullion transactions tax neutral in any given year and argued it could protect savers against inflation and national debt concerns.
The bill drew support from industry and advocacy witnesses, including JP Cortez, executive director of the Sound Money Defense League, and Larry Schneider, owner of Bismarck Gold and Silver Exchange. Cortez testified the capital gains tax is a tax on “phantom gains” and argued bullion is used by middle‑class savers to preserve wealth. Schneider told the committee the measure could encourage North Dakotans to hold bullion IRAs and bring deposits and related business to North Dakota.
Tax department staff offered a technical observation and requested a specific wording change to reflect the sponsor’s intent. Matt Pearl of the North Dakota Tax Department asked that the statute be written to include net capital losses as well as net capital gains so the adjustment functions correctly for both individual and corporate returns. The committee approved that amendment unanimously.
Several senators, however, said the bill would benefit only a small share of taxpayers and expressed concern about oversight and consumer protections for bullion depositories. Senator Patton said he was worried about the lack of regulatory oversight, auditing provisions and consumer protections for storage or depository arrangements. Chairman Weber also said he was likely to vote against the bill partly because there were no existing oversight regulations for bullion depositories.
After adopting the amendment to add an explicit reference to net capital losses, the committee rejected HB 13‑79. A do‑not‑pass recommendation carried; Senator Patton will carry the measure to the floor.
Votes at a glance
- Amendment (insert “or net capital loss” after “net capital gain” on page 1): approved 6–0 (Yes: Chairman Weber; Vice Chair Romo; Senator Marsali; Senator Patton; Senator Powers; Senator Walling).
- Committee recommendation on HB 13‑79: do not pass 4–2 (Yes/do‑not‑pass: Chairman Weber; Vice Chair Rummel; Senator Marsali; Senator Patton. No/oppose do‑not‑pass (i.e., supported due pass): Senator Powers; Senator Wong).
