Nebraska Abolishes Income Tax on Gold and Silver, Declares Central Bank Digital Currencies as Non-Legal Tender

Nebraska Joins Other States in Ending Capital Gains Tax on Precious Metals

Nebraska, under the leadership of Governor Jim Pillen, has become the twelfth state to abolish capital gains tax on the sale of gold and silver. The move, sanctioned by LB 1317, is the fourth significant sound money legislation to be enacted this year as states across the country strive to safeguard their citizens from the damaging effects of inflation and unchecked federal debt.

According to the new law in Nebraska, any reported "gains" or "losses" on the sale of precious metals on federal income tax returns are negated, thus eliminating them from the computation of a Nebraska taxpayer's adjusted gross income (AGI).

Nebraska’s Sound Money Measure

The Sound Money Defense League, Money Metals Exchange, and local advocates supported the sound money measure in Nebraska. The legislation passed unanimously out of the unicameral legislature's Revenue committee before being incorporated into a larger bill.

Senator Ben Hansen, the sponsor of the legislation, stated that gold and silver are the only forms of currency mentioned in the Constitution, and citizens should be able to use them without any government penalty. He added that the 'gains' taxpayers often realize when converting these metals back into Federal Reserve notes do not reflect a real increase in value but rather the ongoing devaluation of the currency.

Nebraska’s Stance on Capital Gains Tax

Despite the lack of "real" gains, the Internal Revenue Service imposes capital gains taxes on such transactions. Nebraska has now chosen to opt out at the state level, refusing to incorporate the IRS's stance into the definition of Nebraska income.

Jp Cortez, the executive director of the Sound Money Defense League, testified before the Revenue Committee that the intense wave of inflation facing Nebraskans is largely due to the detrimental actions of the Federal Reserve. He suggested that the state could provide its citizens with easier access to gold and silver ownership as these metals are not only a proven hedge against inflation but are also being remonetized as constitutional sound money in various states.

Other States’ Position on Precious Metals Income Tax

Eleven other states, including Arkansas, Arizona, and Utah, do not levy an income tax on the sale of precious metals, having recently enacted such laws. Meanwhile, Iowa, Georgia, Oklahoma, Missouri, West Virginia, and Kansas are considering similar legislation in 2024.

Stefan Gleason, CEO of Money Metals and Chairman of the Sound Money Defense League, stated that investments in precious metals coins and bullion in Nebraska are now rightfully exempt from both sales tax and income tax. This move significantly reduces the disincentives in the Cornhusker State against the ownership and use of monetary metals.

Nebraska’s Stance on Central Bank Digital Currency

LB 1317 also revises the state's formal definition of money by stating that "Money does not include central bank digital currency." The new law defines central bank digital currency (CBDC) as a digital medium of exchange, token, or monetary unit of account issued by the United States Federal Reserve System or any similar federal agency that is made directly available to the consumer by such federal entities.

Senator Hansen stated that they need to be extra vigilant in their assessment and application of a Central bank digital currency to ensure they do not become a threat to our freedom. That's why LB 1317 defined that CBDCs are not classified as currency in Nebraska, which should help protect against unwarranted mandates for their use in the future.

Versions of this "anti-CBDC language" have advanced or been signed into law in Tennessee, North Carolina, Florida, South Dakota, and Indiana. Congressman Alex Mooney has also introduced a federal measure to block the Federal Reserve's digital currency scheme.

Nebraska joins Utah, Wisconsin, and Kentucky as states that have enacted pro-sound money legislation into law so far in 2024. Nebraska, currently ranked 22nd in the 2024 Sound Money Index, is expected to rise in ranking.

What's your opinion?

This article presents an interesting perspective on the ongoing debate about the role of precious metals and digital currencies in our economy. What do you think about Nebraska's decision to end income tax on gold and silver and its stance on Central Bank Digital Currencies? Share your thoughts and this article with your friends. And don't forget to sign up for the Daily Briefing, every day at 6pm.