Sales Tax on Bullion in Michigan: What the 900 Fineness Rule Really Covers

What Michigan actually exempts under Section 205.54s

Michigan is one of the more consistent states in the country for physical precious-metals buyers. The statute doing the work is Michigan Compiled Laws Section 205.54s, a provision of the General Sales Tax Act. Read together with its companion in the Use Tax Act, it carves out two categories from the state’s 6 percent sales tax.

• Refined gold, silver and platinum bullion of 900 fineness or higher. Bars, rounds and ingots whose price is set primarily by metal content and spot price, not by artistic or collectible premium, and whose purity is at least 90 percent.
• Investment coins where fair market value exceeds face value. American Gold Eagles, American Silver Eagles, Canadian Maple Leafs, Austrian Philharmonics, Krugerrands and similar sovereign-mint coinage that circulates (or once circulated) as currency somewhere in the world, plus numismatic coins that sell above face value for collector premium.

The exemption is broad enough that most bullion and coin purchases made in Michigan or shipped into Michigan are tax-free at the point of sale. The 900 fineness rule is the hinge: once metal purity drops below 90 percent (common 14-karat and 10-karat jewelry alloys), the bullion branch no longer applies. The investment coin branch is more forgiving because it looks at market-versus-face-value rather than purity.

What still gets taxed: jewelry, palladium and the borderline cases

Everything else a precious-metals shop might ring up is standard taxable retail at a flat 6 percent:

Three lines from that table trip up first-time buyers most often. Palladium is the first: Section 205.54s names gold, silver and platinum only, so a 1 oz palladium Maple Leaf carries the 6 percent state rate at a Michigan dealer even though the silver Maple Leaf on the same shelf does not. Jewelry is the second: a 24-karat gold pendant is metallurgically identical to a 1 oz gold bar, but the moment metal takes a jewelry form it stops being bullion in the eyes of the Michigan Department of Treasury and becomes standard taxable retail. The third is lower-purity gold: a 14-karat gold bar at 58.3 percent gold fails the 900 fineness test and does not qualify even when sold as a bar.

How Michigan sales tax rates actually stack

Michigan runs a cleaner model than most states because it has no local sales tax. The Michigan Department of Treasury Sales and Use Tax guidance sets a single statewide rate:

• State rate: 6 percent on retail sales, leases and rentals of most goods and taxable services.
• Local add-on: none. Michigan cities, counties and transit authorities cannot impose a general sales tax on top of the state rate.
• Combined rate: 6 percent, flat statewide.

On a mixed cart an exempt Silver Eagle and a taxable copper round trigger two math paths at checkout: zero on the coin, 6 percent on the round. Dealers who handle both need a point-of-sale configuration that separates bullion SKUs from accessory SKUs so the invoice itemizes correctly. The uniformity is a quiet advantage for Michigan dealers: no Detroit-only surcharge, no Lansing special district, no transit-authority add-on. The 6 percent is the number regardless of ZIP code.

Online, in-store and out-of-state: who collects, who self-reports

Since the US Supreme Court decision in South Dakota v. Wayfair (2018), out-of-state online retailers with enough Michigan sales must register and collect Michigan sales and use tax on shipments to Michigan addresses. That did not change the substance of Section 205.54s, but it changed who writes the check.

• Eligible bullion or investment coin shipped from any state to Michigan: not taxable. Well-run national dealers configure their carts to zero out the tax line on these SKUs for Michigan orders.
• Non-exempt item (jewelry, palladium, accessories) shipped to Michigan: the seller usually collects the flat 6 percent at checkout, or the buyer self-reports the matching use tax on their Michigan income tax return (Form MI-1040).
• In-person purchase at a Michigan coin shop: same substantive rules. Local tax is a non-issue because there is no local sales tax.
• Taxable item bought in person in Indiana, Ohio or Illinois and brought home: the Michigan resident technically owes the 6 percent Michigan use tax, with a credit for sales tax properly collected at the origin.

If you see a line item labeled “sales tax” on eligible bullion shipped to a Michigan address, ask the dealer to correct the invoice and cite Section 205.54s. Recovery from the Department of Treasury on a wrongly collected third-party sales tax is a slow, paperwork-heavy path.

Michigan buyers in the regional context

The Detroit metro area, Grand Rapids and Lansing host long-running coin shops and precious-metals offices. Our Michigan coin dealer directory lists verified shops by city with hours, services and reader reviews, and the Michigan gold dealer directory covers broader bullion operations. For current spot pricing before a purchase, use our internal gold value calculator and the gold price page.

Practical scenarios: what a Michigan buyer actually pays

Two worked examples, using the flat 6 percent on taxable items:

1. Grand Rapids coin shop, 10,000 dollar order of 1 oz American Gold Eagles. Sales tax owed: 0 dollars. The coins qualify as investment coins and as refined gold above 900 fineness, exempt under Section 205.54s.
2. Same shop, 2,000 dollar order of 14-karat gold jewelry. State tax: 120 dollars (6 percent). No local add-on. Total: 120 dollars owed at checkout, bringing the receipt to 2,120 dollars.

A third scenario shows the online path. An out-of-state dealer in Delaware ships 5,000 dollars in palladium bars plus 5,000 dollars in silver rounds to a Detroit address. Silver rounds: 0 dollars (exempt). Palladium bars: 6 percent on the 5,000 dollar palladium portion, so 300 dollars collected at checkout. Mixed invoices should break out the tax line by SKU category, not blended across the whole order.

For a buyer building a stack of qualifying bullion and investment coins, Michigan is effectively a zero-sales-tax state. For a buyer picking up palladium or jewelry alongside, the 6 percent on the taxable portion is unavoidable.

Record-keeping and audit exposure

Keep the invoice for every precious-metals purchase, whether tax was collected or not. The invoice should show the item description, the quantity, the price and, for exempt items, either a zero tax line or a clear notation of the Section 205.54s exemption. A dealer who refuses to itemize or lumps taxable and exempt items into a single subtotal is a red flag on both sales-tax compliance and shop transparency. For dealers, the Michigan Department of Treasury can audit sales and use tax returns for four years and expects contemporaneous documentation showing which line items were exempt and why.

How Michigan compares to its Great Lakes neighbors

Michigan is not alone in exempting bullion, but the specifics vary across state lines:

• Ohio: enacted a precious-metals exemption that was repealed in 2019 and later restored; buyers should verify the current treatment before a large order placed from across the state line.
• Indiana: exempts coins and bullion of 90 percent purity or higher under its own statute, with structure similar to Michigan.
• Illinois: exempts bullion but imposes different sales tax treatment on jewelry and non-bullion coins, with Chicago-area local rates adding complexity that Michigan does not have.
• Wisconsin: taxable in most categories except narrow carve-outs; buyers moving between Wisconsin and the Upper Peninsula should factor this in on jewelry trips.
• Federal treatment: entirely separate. Regardless of state sales tax, physical gold and silver held more than one year are federally taxed as collectibles at up to 28 percent on realized long-term capital gains under IRC Section 1(h)(4). Our capital gains guide walks through the mechanics.

For pure bullion, Michigan is already tax-free on qualifying items, so there is nothing to save by crossing a state line. For jewelry the math usually tips the other way once Michigan use tax and travel cost are factored in. See the full picture on our state sales tax on bullion map.

Where to verify before you buy

Rules change. Before a large purchase, confirm the current text and rate directly with the state:

• Michigan Compiled Laws Section 205.54s, the operating statute for the investment coin and bullion exemption.
• Michigan Department of Treasury Sales and Use Tax, which confirms the 6 percent flat state rate with no local add-on.
• Michigan Department of Treasury tax portal for forms, bulletins and current guidance.
• IRS Topic 409: Capital Gains and Losses, for the separate federal collectibles rate applicable when bullion is later sold at a gain.

This guide is educational, reflects our reading of the public Michigan Department of Treasury guidance and the text of Section 205.54s current at publication, and is not legal or tax advice. For a substantial purchase, an audit issue, or a dealer starting a Michigan storefront, a licensed Michigan CPA or sales-tax attorney is the right call.