The Joint Legislative Audit and Review Committee presented its 2024 review of two tax preferences for precious metals and monetized bullion to the House Finance Committee on Jan. 14.

JLARC staff reported beneficiary savings rose from about $5.1 million in 2017 to $28.4 million in fiscal 2023 (a 457 percent increase). Across the review period, reported savings from the two preferences totaled about $111 million, and JLARC estimated future biennial savings near $165 million if current trends continue.

The Legislature did not state an explicit objective when enacting the preferences in 1985. JLARC’s inferred objective is to make Washington coin and bullion sellers competitive with out‑of‑state sellers by treating sales of certain precious metals like other investments. The review found the preferences can make in‑person Washington sellers more competitive by reducing the purchase price, but the preferences also apply to out‑of‑state sellers and thus do not uniquely advantage local online sellers after the U.S. Supreme Court’s South Dakota v. Wayfair decision enabled destination-based taxation for remote sellers.

JLARC reported that out‑of‑state sellers’ share of reported savings rose from about 24 percent in 2017 to nearly 40 percent in 2023, a trend JLARC linked to growth in online sales. The legislative auditor recommended the Legislature decide whether to continue the preferences and, if so, add a clear public-policy objective and establish performance metrics to measure whether they achieve that goal.