Michigan Precious Metals Tax Guide: What You Need to Know

Investing in precious metals is one of the smartest financial decisions Michigan residents can make—especially when you understand the state’s favorable tax laws. Unlike many states that impose burdensome sales taxes on gold and silver purchases, Michigan offers significant exemptions that make bullion investing more accessible and profitable. Whether you’re in Detroit, Grand Rapids, Ann Arbor, or anywhere across the Great Lakes State, understanding Michigan’s precious metals tax structure can save you thousands of dollars and help you build wealth more efficiently.

In this comprehensive guide, we’ll walk you through everything Michigan investors need to know about sales tax exemptions, federal and state capital gains obligations, and smart strategies to minimize your tax burden when buying and selling precious metals.

Michigan Sales Tax Exemption for Precious Metals

One of Michigan’s most attractive features for precious metals investors is its broad sales tax exemption. While the state maintains a 6% sales tax rate on most goods, Michigan law provides generous exemptions for investment-grade bullion—making it one of the more investor-friendly states in the nation.

What’s Exempt from Sales Tax in Michigan?

Michigan law (specifically MCL 205.54s) exempts several categories of precious metals from the state’s 6% sales tax. To qualify for tax-exempt status, your precious metals purchase must meet specific criteria:

Gold, Silver, and Platinum Bullion (90%+ Purity)

The cornerstone of Michigan’s exemption is refined bullion with a purity of at least 90% (or .900 fine). This includes:

• Gold bars and ingots from recognized refiners
• Silver bars in various sizes (from 1 oz to 100 oz)
• Platinum bullion products
• Investment-grade rounds from private mints

The law defines “bullion” as precious metals in a bulk state where the value depends on metal content rather than form. This means when you purchase silver bars or gold bullion that meets the 90% purity threshold, you won’t pay Michigan sales tax.

Legal Tender Coins with Value Above Face Value

Michigan also exempts “investment coins” defined as numismatic coins or legal tender manufactured of gold, silver, platinum, palladium, or other metals issued by the U.S. government or foreign governments—as long as the fair market value exceeds the face value.

This means popular investment coins like:

• American Gold Eagles
• American Silver Eagles
• Canadian Gold Maple Leafs
• Canadian Silver Maple Leafs
• Gold Buffalos
• Gold Krugerrands

All of these are completely exempt from Michigan sales tax when purchased for investment purposes.

Investment-Grade Precious Metals

Any precious metal product where the value is primarily determined by its metal content—rather than its artistic, collectible, or numismatic value—typically qualifies for the exemption. This includes:

• Standard gold and silver bullion coins
• Government-minted bullion products
• Silver rounds from reputable private mints (meeting purity standards)
• Platinum products with 90%+ purity

What IS Taxable in Michigan?

Understanding what doesn’t qualify for the exemption is equally important. Michigan’s 6% sales tax applies to:

Copper Products

All copper bullion, rounds, and bars are subject to sales tax in Michigan. Copper doesn’t meet the precious metal definition under state law.

Bullion Below 90% Purity

If your gold, silver, or platinum product is less than 90% pure, it doesn’t qualify for the sales tax exemption. This typically affects:

• Lower-grade silver items
• Jewelry-grade metals
• Some collectible or commemorative items with lower purity

Non-Investment Coins

Coins where the fair market value doesn’t exceed face value are taxable. This primarily applies to circulated coins being sold at or below face value.

Numismatic Items Not Considered Legal Tender

Medallions, tokens, and commemorative pieces from non-recognized sources that aren’t legal tender fall outside the exemption.

Accessories and Processed Items

Michigan taxes precious metal accessories such as:

• Coin holders and tubes
• Display cases
• Storage boxes
• Coin flips and capsules

Jewelry and Decorative Items

Precious metal jewelry, decorative objects, and processed items where value is based on craftsmanship rather than metal content are subject to sales tax.

Understanding the 90% Purity Requirement

The 90% purity threshold is crucial for Michigan investors. This standard covers virtually all investment-grade bullion products while excluding lower-quality items that may have collectible but not investment value.

Why 90% Matters

The 90% (.900 fine) standard ensures that the exemption applies to genuine investment-grade precious metals while preventing abuse through low-quality items marketed as “bullion.”

Which Popular Products Qualify

• American Gold Eagles: .9167 fine (91.67% pure) ✓
• Canadian Gold Maple Leafs: .9999 fine (99.99% pure) ✓
• American Silver Eagles: .999 fine (99.9% pure) ✓
• Silver bars from Royal Canadian Mint: .999 or .9999 fine ✓
• Gold bars: Typically .999 or .9999 fine ✓

Essentially, any reputable bullion product you’d purchase for investment purposes will exceed the 90% purity requirement and qualify for Michigan’s sales tax exemption.

Federal Capital Gains Tax on Precious Metals

While Michigan offers attractive sales tax exemptions, both Michigan residents and all U.S. investors must understand federal capital gains taxation. The IRS classifies precious metals as “collectibles,” which carries specific tax implications that differ from stocks, bonds, or real estate.

How Precious Metals Are Taxed Federally

The federal government treats gold, silver, platinum, and other precious metals as collectible assets under the tax code. This classification means precious metals are subject to special capital gains tax treatment—with a maximum rate of 28% on long-term gains, regardless of your income level.

This is notably different from traditional investments like stocks, where long-term capital gains are taxed at preferential rates of 0%, 15%, or 20% depending on income.

Short-Term Capital Gains (Less Than 1 Year)

If you sell precious metals that you’ve held for one year or less, any profit is considered a short-term capital gain and taxed as ordinary income at your marginal tax rate.

For 2025, federal ordinary income tax rates range from 10% to 37% depending on your taxable income and filing status. This means:

• If you’re in the 22% tax bracket and sell gold after 10 months for a $5,000 profit, you’ll owe $1,100 in federal taxes
• Higher earners in the 35% or 37% brackets pay significantly more on short-term gains

Key Takeaway: Holding precious metals for less than a year results in higher tax obligations for most investors.

Long-Term Capital Gains (More Than 1 Year)

When you hold precious metals for more than one year before selling, you’ll pay long-term capital gains tax. However, because precious metals are classified as collectibles, they’re subject to a maximum federal rate of 28%—higher than the standard long-term capital gains rates.

2025 Federal Long-Term Capital Gains Rates (Most Assets):

• 0% for single filers with taxable income up to $48,350 ($96,700 married filing jointly)
• 15% for income between $48,350-$533,400 single ($96,700-$600,050 married)
• 20% for income above $533,400 single ($600,050 married)

Precious Metals (Collectibles) Rate:

• Up to 28% maximum, based on your ordinary income tax bracket
• If your marginal rate is below 28%, you pay your marginal rate
• If your marginal rate is 28% or higher, you pay 28%

Example: A Michigan investor in the 24% federal tax bracket who sells silver bullion held for 18 months will pay 24% federal tax on the gain—not the preferential 15% rate they’d pay on stock gains.

Michigan State Capital Gains Tax

In addition to federal obligations, Michigan investors must also account for state-level capital gains taxation. Michigan’s approach is simpler than many states but still adds to your overall tax burden.

Michigan’s Flat Income Tax Approach

Michigan employs a flat income tax rate of 4.25% on all taxable income—including capital gains. Unlike the federal system that distinguishes between short-term and long-term gains, Michigan treats all capital gains as ordinary income subject to the same 4.25% rate.

This simplicity has both advantages and disadvantages:

Advantages:

• Predictable tax rate regardless of holding period
• No complex calculations based on income brackets
• Lower than many states with progressive capital gains taxes

Disadvantages:

• No preferential treatment for long-term holdings at the state level
• Must pay state tax even on long-term capital gains

Combined Federal and State Tax Burden

When you sell precious metals for a profit in Michigan, you’ll face both federal and state taxes. Here’s how the combined burden looks:

Long-Term Capital Gains Example (held more than 1 year):

• Federal tax: Up to 28% (collectibles rate)
• Michigan state tax: 4.25%
• Total maximum rate: 32.25%

Short-Term Capital Gains Example (held less than 1 year):

• Federal tax: Your ordinary income rate (10%-37%)
• Michigan state tax: 4.25%
• Total rate: 14.25% to 41.25%

Real-World Scenario:

Sarah, a Michigan investor from Ann Arbor, bought 100 oz of silver bars two years ago for $2,500. She sells them today for $4,000, realizing a $1,500 gain.

• Federal tax (24% bracket): $360
• Michigan state tax (4.25%): $63.75
• Total tax: $423.75
• Net profit after taxes: $1,076.25

Proposed Legislation to Watch

Michigan investors should stay informed about potential tax relief. In 2024, Michigan House Bill 5577 was introduced to eliminate state capital gains taxes on gold and silver transactions. While the bill hasn’t passed into law, it represents growing recognition that removing tax barriers could benefit Michigan’s economy and align with sound money principles.

If HB5577 or similar legislation passes, Michigan investors would only face federal capital gains obligations—saving the 4.25% state tax on precious metals sales. This would make Michigan one of the most tax-friendly states for bullion investing.

Local Sales Tax Considerations

One significant advantage Michigan offers precious metals investors is the absence of complex local tax complications that plague investors in other states.

Michigan’s Unique Tax Structure

Michigan maintains a statewide 6% sales tax rate with no additional local sales taxes imposed by counties or municipalities. This contrasts sharply with states like:

• California: 7.25% state + up to 2.5% local = up to 9.75% total
• Alabama: 4% state + up to 7% local = up to 11% total
• Louisiana: 4.45% state + up to 7% local = up to 11.45% total

What This Means for Michigan Precious Metals Buyers:

When you purchase tax-exempt precious metals in Michigan, you simply don’t pay sales tax—period. There are no local jurisdictions that can add sales taxes to your purchase, making tax calculation straightforward and beneficial.

For taxable precious metals items (like copper products or accessories), you’ll pay only the 6% state rate regardless of whether you’re in Detroit, Grand Rapids, Lansing, or rural Michigan.

Advantage Over Complex Local Tax Systems

States with local option sales taxes create confusion and higher costs for precious metals investors. In Michigan, you can:

• Know exactly what you’ll pay regardless of location
• Avoid researching different county and city tax rates
• Benefit from consistent treatment statewide

This simplicity makes Michigan particularly attractive for investors who value transparency and predictability in their precious metals purchases.

Tax-Smart Buying Strategies for Michigan Investors

Understanding Michigan’s tax laws enables you to implement strategic approaches that minimize your tax burden and maximize investment returns.

Choose Tax-Exempt Products

The easiest way to save money is to focus your purchases on items that qualify for Michigan’s sales tax exemption:

Prioritize:

• Gold and silver bars with 90%+ purity
• Recognized legal tender coins (Eagles, Maple Leafs, etc.)
• Government-minted bullion products
• Platinum products meeting purity requirements

Avoid or Minimize:

• Copper products
• Precious metal jewelry
• Commemorative items below 90% purity
• Decorative or processed items

By concentrating your investment dollars on tax-exempt bullion, you immediately save 6% compared to taxable purchases—a significant advantage that compounds over time.

Purchase in Larger Quantities

Unlike some states that require minimum purchase amounts for sales tax exemptions, Michigan has no such threshold. Whether you buy a single 1 oz silver round or 100 oz silver bars, the exemption applies if the product meets purity requirements.

However, purchasing larger quantities offers other advantages:

• Lower premiums per ounce on bulk purchases
• Reduced shipping costs per ounce
• Easier portfolio management
• Potentially better negotiating power

Consider building your position through strategic purchases rather than many small transactions.

Document Everything

Proper record-keeping is essential for minimizing tax complications:

Keep Purchase Receipts showing:

• Date of purchase
• Product description and purity
• Amount paid (your cost basis)
• Dealer information

Record Cost Basis Accurately: Your cost basis includes:

• Purchase price
• Shipping fees
• Insurance costs
• Any other acquisition expenses

Track Holding Periods: Document purchase dates to know when investments cross the one-year threshold for long-term capital gains treatment.

Maintain Organized Records: Create a simple spreadsheet or use portfolio tracking software to monitor:

• Purchase dates and amounts
• Current holdings
• Realized gains/losses
• Holding periods

This documentation proves invaluable when selling precious metals and calculating capital gains for tax reporting.

Consider Timing Your Sales

Strategic timing of precious metals sales can reduce your tax burden:

Tax-Loss Harvesting: If you have precious metals holdings with losses, consider selling them in years when you have capital gains from other sources. Capital losses offset capital gains dollar-for-dollar, reducing your overall tax liability.

Hold for Long-Term Treatment: If you’re approaching the one-year holding period and your marginal tax rate is high, waiting a few more weeks or months to qualify for the 28% maximum federal rate (instead of ordinary income rates up to 37%) can save thousands.

Year-End Planning: Review your precious metals portfolio each autumn to:

• Assess gains and losses
• Determine optimal timing for sales
• Coordinate with other investment decisions
• Plan for the following year’s purchases

Spread Sales Across Years: If you have substantial gains, consider selling portions across multiple tax years to avoid pushing yourself into higher tax brackets or triggering additional taxes like the Net Investment Income Tax (3.8% surtax on high earners).

Popular Products and Their Tax Status

Knowing which specific products qualify for Michigan’s sales tax exemption helps you make informed purchasing decisions.

Always Tax-Exempt in Michigan

American Gold Eagles: These iconic U.S. coins contain 91.67% gold (.9167 fine), exceeding Michigan’s 90% requirement. They’re legal tender with values far exceeding face value, making them fully exempt from sales tax.

American Silver Eagles: At 99.9% silver purity and U.S. legal tender status, Silver Eagles are quintessential tax-exempt investments in Michigan.

Canadian Gold Maple Leafs: With 99.99% gold purity, Canadian Gold Maple Leafs easily qualify for Michigan’s exemption.

Canadian Silver Maple Leafs: Another 99.9% pure option that’s completely tax-exempt for Michigan investors.

Gold and Silver Bars (90%+ Purity): Whether purchasing 10 oz silver bars or larger 100 oz bars, investment-grade bullion bars from recognized refiners meet Michigan’s exemption criteria.

Platinum Products: Platinum coins and bars with 90%+ purity qualify for the sales tax exemption, offering diversification opportunities without tax penalties.

Gold Buffalos: These 24-karat (99.99% pure) American gold coins are fully exempt.

Silver Rounds from Reputable Mints: Private mint silver rounds with .999 or higher purity qualify for Michigan’s exemption, offering lower-premium alternatives to government coins.

May Be Taxable

Copper Rounds and Bars: All copper bullion products are subject to Michigan’s 6% sales tax.

Low-Purity Items: Gold or silver below 90% purity doesn’t qualify for exemption.

Commemorative Medals: Non-legal tender medallions or tokens typically are taxable.

Processed Jewelry: Even if made from precious metals, jewelry is valued for craftsmanship and form, making it taxable.

Accessories: Coin tubes, holders, and storage supplies are subject to sales tax.

Reporting Requirements for Michigan Investors

Understanding reporting obligations helps you stay compliant with federal and state tax laws while avoiding penalties.

When Dealers Must Report to IRS

Precious metals dealers are required to file Form 1099-B with the IRS for certain transactions. This reporting typically triggers when you sell specific quantities of certain products:

Products Requiring Dealer Reporting:

• 25 or more 1 oz Gold Maple Leafs
• 25 or more 1 oz Krugerrands
• 1,000 oz of silver bars
• Certain platinum and palladium products in specified quantities

Large Cash Transactions: Any cash purchase or sale exceeding $10,000 requires the dealer to file Form 8300 with the IRS. This includes multiple related transactions that total more than $10,000 within a 12-month period.

Important Note: Just because a dealer doesn’t file Form 1099-B doesn’t mean you’re not responsible for reporting capital gains. You must report all taxable gains regardless of whether you receive a 1099-B form.

Your Responsibilities as an Investor

Reporting Capital Gains on Tax Returns:

All Michigan investors must report precious metals capital gains on both federal and state tax returns:

• Federal: Use Schedule D (Capital Gains and Losses) and Form 8949 (Sales and Other Dispositions of Capital Assets)
• Michigan: Report on Michigan Form MI-1040 as part of your adjusted gross income

Record-Keeping Best Practices:

The IRS requires you to maintain records supporting your cost basis, holding period, and sales proceeds. Best practices include:

• Keeping all purchase and sale documentation
• Maintaining records for at least seven years after filing
• Organizing documentation by tax year
• Photographing or scanning physical receipts for backup

Working with a Tax Professional:

Given the complexity of precious metals taxation—especially the collectibles treatment at the federal level—consider working with a CPA or tax advisor who understands:

• Collectibles capital gains rules
• Michigan state tax requirements
• Strategic timing of sales
• Tax-loss harvesting opportunities

An experienced tax professional can help you minimize your tax burden legally while ensuring full compliance.

Comparing Michigan to Neighboring States

Understanding how Michigan compares to nearby states helps you appreciate the advantages of the Great Lakes State’s precious metals tax structure.

Ohio

Sales Tax: Ohio eliminated sales tax on precious metals in 2021 under House Bill 110, making all gold, silver, platinum, and palladium bullion purchases completely tax-free.

Capital Gains Tax: Ohio has a progressive state income tax with rates ranging from 0% to 3.75% (depending on income), applied to all capital gains including precious metals.

Comparison: Ohio offers slightly better sales tax treatment (no purity requirements), but Michigan’s simpler flat 4.25% capital gains rate may be higher or lower than Ohio’s depending on your income bracket.

Indiana

Sales Tax: Indiana charges 7% sales tax on most precious metals purchases, though some exemptions exist for investment-grade items depending on specific circumstances.

Capital Gains Tax: Indiana has a flat 3.15% state income tax rate on all income including capital gains.

Comparison: Michigan significantly outperforms Indiana on sales tax (Michigan’s broad exemption vs. Indiana’s 7% rate), though Indiana has a lower capital gains rate.

Wisconsin

Sales Tax: Wisconsin recently passed Assembly Bill 29 (signed into law in 2025), eliminating state sales tax on precious metals. This brings Wisconsin in line with sound money principles.

Capital Gains Tax: Wisconsin has progressive income tax rates from 3.50% to 7.65%, applied to capital gains.

Comparison: Wisconsin now matches Michigan on sales tax exemptions but may have higher capital gains taxes depending on your income.

Why Michigan Remains Competitive

Michigan’s combination of:

• Broad sales tax exemptions for 90%+ purity bullion
• Flat 4.25% capital gains rate (predictable and moderate)
• No local sales tax complications
• Proposed legislation to potentially eliminate capital gains on precious metals

makes it one of the more favorable states for precious metals investing in the Midwest. While some neighboring states offer lower capital gains rates, Michigan’s comprehensive sales tax exemption ensures you save money from your very first purchase.

Common Tax Mistakes to Avoid

Even with Michigan’s relatively straightforward tax laws, investors can make costly errors. Avoid these common mistakes:

Assuming All Precious Metals Are Tax-Free

Many Michigan investors incorrectly believe all precious metals purchases are exempt from sales tax. Remember:

• Only 90%+ purity bullion qualifies
• Copper products are always taxable
• Accessories and jewelry are taxable
• Legal tender requirement applies to coins

Not Tracking Cost Basis

Failing to document your purchase price and associated costs leads to problems when selling:

• You may overpay taxes by understating your cost basis
• You can’t take advantage of losses without proper documentation
• IRS audits become problematic without records

Solution: Maintain detailed purchase records from day one.

Ignoring Purity Requirements

Purchasing precious metals below 90% purity triggers sales tax unnecessarily. Before buying:

• Verify purity specifications
• Confirm the product meets Michigan’s .900 fine minimum
• Choose recognized bullion products that clearly exceed thresholds

Failing to Report Capital Gains

Some investors mistakenly believe that if they don’t receive Form 1099-B, they don’t need to report gains. This is false and can result in:

• Underpayment penalties
• Interest charges
• Potential audit flags
• Criminal tax evasion charges in extreme cases

Remember: You must report all precious metals capital gains regardless of whether the dealer reports the transaction.

Buying Taxable Accessories Without Realizing It

When purchasing precious metals, avoid automatically adding accessories to your order without considering the tax impact:

• Coin tubes: Taxable
• Storage boxes: Taxable
• Display cases: Taxable
• Capsules and flips: Taxable

These items may seem minor, but 6% tax on $100 worth of accessories is $6 you didn’t need to spend.

Conclusion: Maximize Your Michigan Precious Metals Investment

Michigan offers one of the most favorable environments for precious metals investing in the United States. With broad sales tax exemptions for investment-grade bullion, a predictable flat capital gains rate, and no local tax complications, Michigan investors can build wealth through gold and silver more efficiently than residents of many other states.

Key Takeaways for Michigan Precious Metals Investors:

1. Sales Tax Exemption: Focus on 90%+ purity bullion and legal tender coins to avoid Michigan’s 6% sales tax completely
2. Federal Capital Gains: Plan for up to 28% federal tax on long-term gains from precious metals (collectibles rate)
3. State Capital Gains: Factor in Michigan’s flat 4.25% rate on all precious metals gains
4. Strategic Timing: Hold investments longer than one year to avoid higher short-term capital gains rates
5. Proper Documentation: Maintain detailed records of all purchases and sales for tax reporting
6. Stay Informed: Watch for potential legislation like HB5577 that could eliminate state capital gains taxes on precious metals

Whether you’re a first-time buyer or experienced investor, understanding these tax rules empowers you to make smarter decisions and keep more of your wealth.

Ready to Start Building Your Tax-Advantaged Precious Metals Portfolio?

CanAm Bullion proudly serves Michigan investors across the state—from Detroit and Grand Rapids to Ann Arbor, Lansing, and beyond. We offer:

• Tax-Exempt Products: Extensive selection of gold coins, silver bars, and platinum bullion meeting Michigan’s 90%+ purity requirement
• Competitive Pricing: Best market rates on investment-grade precious metals
• Expert Guidance: Our precious metals specialists help you navigate tax considerations and investment strategies
• Royal Canadian Mint Certified: Authorized dealer offering authentic products from trusted mints worldwide
• A+ BBB Rating: Proven track record of excellent customer service

Browse our selection of tax-advantaged precious metals today, or call our team at +1 (844) 828-4653 to discuss your investment goals.

Invest smart. Invest tax-efficiently. Invest with CanAm Bullion.

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Disclaimer: This article provides general information about Michigan precious metals tax laws and should not be considered tax or legal advice. Tax laws change regularly, and individual circumstances vary. We recommend consulting with a qualified tax professional or CPA regarding your specific situation. CanAm Bullion does not provide tax, legal, or investment advice.