Alabama gold and silver money law

Alabama exempts the gross proceeds of sales of bullion or money from sales and use tax under Code of Alabama 1975 Section 40-23-4(a)(51), created by Act 2018-164 (SB156) and amended by Act 2022-373 (SB13). As originally enacted, the exemption ran for five years from June 1, 2018, and required bullion to contain at least ninety percent gold, silver, platinum, or palladium. Act 2022-373 struck "five" and inserted "10" in the sunset clause, extending the exemption through May 31, 2028, and struck "ninety" in favor of "80" in the purity clause, so bullion now qualifies at 80 percent precious metal content. The statute defines bullion as gold, silver, platinum, palladium, or a combination that has gone through a refining process and whose value depends on mass and purity rather than form or numismatic value, covering bars, ingots, rounds, and coins, and it excludes jewelry and works of art. The sales price must fluctuate with the market price of the underlying metal. There is no dollar transaction minimum or maximum anywhere in the statute or in the Department of Revenue administrative rule that implements it, but because the statute conditions the exemption on an 80 percent purity floor, an ordinary purchase of a lower purity commemorative or bullion adjacent item could fail the exemption, so this record classes Alabama as a partial exemption despite its breadth.

Purity condition. 80 percent gold, silver, platinum, or palladium content by weight or combination thereof, lowered from a 90 percent threshold by Act 2022-373 effective 2022

Gold and silver are recognized as legal tender in Alabama and that recognition is in force.

Act 2025-123 (SB130), the Alabama Legal Tender Act, Sections 1 through 3; signed by Governor Kay Ivey and effective October 1, 2025. The enrolled act text does not codify these sections into a numbered title of the Code of Alabama 1975, and this record could not locate a codification section number as of the verified date.

Act 2024-447 (SB297), the "Sound Money Tax Neutrality Act," amended Code of Alabama 1975 Section 40-18-14 to add paragraph (a)(3)n, excluding from gross income for state income tax purposes any net capital gain derived from the exchange of precious metal bullion. The enrolled act restates the entire subsection with the new paragraph shown as underlined inserted text rather than as a redline of an existing clause, since the paragraph is wholly new. It defines "precious metal bullion" for this purpose as coins, bars, or rounds containing primarily refined gold, silver, platinum, or palladium that is marked and valued primarily by its weight, purity, and content, a definition that reaches coin, bar, and round form alike rather than coins only. The act took effect January 1, 2025, and is in force as of this page's verification date.

Alabama built its sound money law in three separate steps over seven years, each aimed at a different tax or monetary status rather than one comprehensive act. The sales tax exemption came first. Senate Bill 156 of 2018, sponsored by Senator Tim Melson, created Code of Alabama 1975 Section 40-23-4(a)(51), exempting the gross proceeds of bullion and money sales from sales and use tax for five years beginning June 1, 2018, provided the bullion was at least ninety percent gold, silver, platinum, or palladium. Governor Kay Ivey signed it March 6, 2018. Senate Bill 13 of 2022, also sponsored by Melson, amended that same subsection: the enrolled bill's redline shows "five" struck and "10" inserted in the sunset clause, extending the exemption through May 31, 2028, and "ninety" struck in favor of "80" in the purity clause, broadening which bullion qualifies. The Department of Revenue's own Administrative Code rule 810-6-2-.27 was amended to match, effective November 14, 2022, and states the exemption as running from June 1, 2018 until May 31, 2028 in its own text.

The income tax treatment came next and separately. Senate Bill 297 of 2024, the "Sound Money Tax Neutrality Act," amended Section 40-18-14 to exclude net capital gain from the exchange of precious metal bullion from gross income, with bullion defined broadly enough to cover coins, bars, and rounds rather than coins alone. The Senate passed it 34 to 0 and the House 100 to 1. It took effect January 1, 2025, and by this page's verification date has been in force for over a year.

Legal tender status came last. Senate Bill 130 of 2025, the Alabama Legal Tender Act, recognizes refined gold or silver bullion, specie, or coin stamped with its weight and purity as legal tender in the state, while making clear no one may be compelled to offer or accept it outside a contract or other legal requirement. The Senate passed it unanimously and the House followed with an overwhelming vote; Governor Ivey signed it in April 2025 and its own text fixes the effective date as October 1, 2025, which has now passed, so the legal tender status is in force. The act creates no depository and does not itself touch either tax statute; Alabama's sales and income tax treatment of bullion rests entirely on the two earlier, separate acts.

None of the three acts references the others by section number, and no single Alabama statute states the sales tax exemption, the capital gains exclusion, and the legal tender recognition together. A reader relying on only one of the three would see an incomplete picture of the state's treatment of bullion.