Nebraska ends capital gains taxes on gold and silver sales

Nebraska Gov. Jim Pillen recently signed into law a measure that would end capital gains taxes on sales of gold and silver. The Cornhusker State has become the 12th state to have enacted pro-sound money legislation to protect the public from the ravages of inflation and runaway federal debt.

Nebraska’s sound money bill passed out of the unicameral legislature’s Revenue Committee unanimously before being amended into a larger bill. The Sound Money Defense League, Money Metals Exchange and in-state advocates supported the measure. Under LB 1317, any gains or losses on precious metal sales reported on federal income tax returns are backed out, thereby removing them from the calculation of a Nebraska taxpayer’s adjusted gross income (AGI).

“Gold and silver are the only forms of currency mentioned in our Constitution and with that comes the people’s ability to use it as such without penalty from the government. Saving and using gold and silver is our right and one of the only checks and balances to our federal government’s unending devaluation of our paper currency,” Sen. Ben Hansen, the bill’s sponsor, said.

Prior to the enactment of the proposal, the law provided that a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital gain results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power. This nominal gain is taxed at the federal level. Because Nebraska uses federal AGI as a starting point for Nebraska income calculations, the state taxes this nominal gain again. Internal Revenue Service (IRS) also imposes capital gains taxes on transactions. Due to the passage of the bill, the state now declines to carry the IRS’s position into the definition of Nebraska income.

During his testimony before the Revenue Committee, Executive Director of the Sound Money Defense League JP Cortez explained that the ferocious wave of inflation facing Nebraskans is largely caused by harmful actions of the Federal Reserve. “The state can take a different course and provide Nebraska citizens cleaner access to gold and silver ownership and these metals are not only a proven inflation hedge but states all over the country are remonetizing constitutional sound money in the forms of gold and silver,” he said.

Nebraska is the 4th state to have enacted pro-sound money legislation into law in 2024 with 11 other states already not charging an income tax on sales of precious metals. Meanwhile, Iowa, Georgia, Oklahoma, Missouri, West Virginia and Kansas have been considering similar legislation in 2024.

Nebraska Ends Income Taxes On Gold And Silver, Declares CBDC’s Are Not Lawful Money

With Gov. Jim Pillen’s recent signature, Nebraska has become the 12th state to end capital gains taxes on sales of gold and silver.

LB 1317 is the fourth major sound money bill to become law… pic.twitter.com/dYYucrBrvY

— Jim Ferguson (@JimFergusonUK) May 13, 2024

LB 1317: CBDC is not lawful money

Meanwhile, LB 1317 revises the state’s formal definition of money by excluding central bank digital currency (CBDC) from the state’s currency: “Money does not include central bank digital currency.”

The new law defines CBDC as a digital medium of exchange, token or monetary unit of account issued by the United States Federal Reserve System or any analogous federal agency that is made directly available to the consumer by such federal entities. CBDC includes a digital medium of exchange, token or monetary unit of account so issued that is processed or validated directly by such federal entities.

According to Hansen, “We have to be extra vigilant in our assessment and application of a Central bank digital currency to make sure they do not become a danger to our freedom. That’s why we defined in LB 1317 that CBDCs are not classified as currency in Nebraska, which should help protect against unwarranted mandates for their use in the future.” (Related: Trump vows to prevent the Federal Reserve from creating an American CBDC.)

Cortez also tackled in his testimony the potential risks of adopting a CBDC and this includes creating a greater ability to track all financial transactions, disallowing certain types of purchases, or even completely “turning off” a targeted individual’s access to money.

Nebraska is ranked 22nd in the 2024 Sound Money Index.

Check out GoldReport.news for more stories related to gold, silver and other precious metals.

Sources for this article include:

Mises.org

FXStreet.com