Revenue & Taxation- House

Risen hot you ready go member without objection members want not go out order here. Members is going to be House I'm sorry Senate bill three thirty six this is an agreed upon bill with the Senate on twenty five million dollar cat. Sorvillo hospital care members recognize yourself and the gentleman to your And the pharmacy thank you chairman's at thank you committee members I know this is not a new bill for you all but it is an exciting bill I think for our Kansans and one that many will appreciate Much like purchasing a stock or bond as an investment you don't pay tax on it when you buy it you pay tax when it sold and you pay tax on the profit on this bill would eliminate any sales tax from precious metals and bullion. it would allow for face to face purchasing advice from Arkansas companies that would be providing the services it would increase as it has in thirty eight states who have passed similar laws in Michigan it increased from one percent of their sales to over ninety four percent of theirs in state sales after this bill similar bill was passed so we see an increase in commerce here in Arkansas and it's a win win for the sellers and the buyers I have asked a friend that I have met this session Mr Dave Mullinax who service outside the Senate chambers as a witness to how as a financial advantage advisor would advise their clients but also as a purchaser of these metals to just share his testimony with us as someone who has been intimately involved with this and can give us some good advice thank you Mr Mullinax which motion okay recognize yourself Sir going to start. When these. This is different. Greetings Mister chair members representative Hart it is a place of pleasure to be here with you today my name is Dave Mullinax I was born and raised right here in Little Rock and no I'm not related to Ted Mullinax. Which I get that a lot I'm a retired financial adviser OWN Mullinax financial group for fifteen years. I retired in two thousand thirteen two thousand fourteen I joined west Pulaski fire department as a certified firefighter and first responder and I'm still active there with them today I was asked at the beginning of this session to serve as a sergeant of arms with the Arkansas Senate in it has been a wonderful experience to this point. And they tell me that if I do real good with the brown jacket that perhaps one day I could move up to the red jacket so looking forward to that. I have written facts removed my jacket. Not out of disrespect but I have removed my jacket simply because I want to be viewed and seen and heard as Justin Justin Arkansas citizen. I am very much in favor of eliminating sales tax on precious metals but not all the taxes and I'll get more into that in just a minute but. Precious metals is a commodity. In general commodities have for for classifications of four types in that is metals energy agriculture livestock and meat. Now. The commodities is just as much of an asset class as stocks or bonds mutual funds cash equivalent global equities real estate all of the adders various classes of assets financial advisors structure portfolios utilizing various assets classes in combination to reduce risk and volatility. Now all asset classes rotate in and out of favor all have risk including US treasuries okay so they all have riso. In an acceptable allocation or waiting in any investment portfolio for precious metals is five to fifteen percent holding Kate in chaotic times a larger percentage of holdings it is is more acceptable but the point I want to make is that it is not outside the norm to have precious metals inside an investment portfolio. We reduce risk or risk reduction in volatility is achieved through diversification. Okay and so as such it implementing precious metals into an investment portfolio reduces volatility and reduces risk hi all right but the but it is an investment in it should be taxed in its peer group as other investments or other asset classes or looked at. Okay and that is in the category of capital gains and not in the category of sales tax. Now I can understand it so to me it's a miss classifications so to speak of early on. But We speak to the purity aspect of it when when I talk about precious metals in an investment poor folio I'm talking about investment grade precious metals in it could be coins it could be bullion it could be bars all of those or the same I'm talking about the purity level okay for example silver silver is point nine nine nine percent pure gold is ninety nine point nine percent your these are investment grade investments. Unlike. Fourteen karat gold which has a purity level with fifty eight percent okay so you would never use something with that purity level as an investment. But somehow the pure investment sometimes the investment grade precious metal somehow got grouped in with the jewelry type. In investments and so that's how it kind of got missed classified and we have an opportunity here with this bill to separated as I believe that it should be noted should be tax from capital gains perspective but not a sales tax perspective. Now with regards All right so that's the basic here. I have morning can speak to Mr. my personal okay. As as an individual I began purchasing precious metals since two thousand and fifteen in the more chaotic that things seem to get I'm not in this boat by myself per se there's thousands of other our Kansans and sadly enough I've had to go outside of the state to purchase my precious minutes. To purchase my precious metals when in fact these purchases and these profits on these purchases should have in fact been capped with Arkansas companies. I do believe that we're on the cusp of one of the biggest bull runs per se for precious metals it is one that will be for the ages so to speak and hi FOR Kansans are forced to go outside. In purchase these then those going to be sales and profits is going to go otherwise when in fact if they could purchase them here without sales tax that would mean the way more jobs there's a lot of people I think I think a big expansion in precious metal dealers would occur if the state would open up you know from cond. To this point and I'm a small investor and I'm going to share some of my personal finance scenarios as it relates to the precious metals but since two thousand and fifteen. And I'm sharing this because this is a reflection of of a lot of other people as well but since two thousand and fifteen I. In investment grade purchased of precious metals now all of that's cap in a commercial vault I don't have it at my home so if if anyone's thinking about swinging by the House eyeing Page a hamburger but you know. But so. The the point is as more chaos is more concerns about our economy and in our currency occur more and more people are looking for But a stable asset in gold and silver provides that for you and so I would be very much in favor of recommending reducing the sales tax and thank you very. Thank you Mr Mullinax thank you Committee. Thank you members any questions. AS in Arkansas and bring the money into the state so motion at the proper time thank you ma'am. Your questions. Yup anybody I speak against the bill or the bill filing good. Many clothes for your bill so I would just like to say in closing that a lot of times that people think that this is only for wealthy individuals this is for every our cans and that would like to have this opportunity for really good investment opportunity and I would just like a positive vote for all of those are Kansans to have the same opportunity and as smartly as Mr Mullenix as done to invest thank you thank you ma'am members we have a motion for a do pass recommendation in debate all in favor say aye. Thank you Sir Dismang still room. All right we're gonna back up the this is going to be a concurrence in the Senate amendment house bill sixteen ninety eight. Yeah concurrence of sixteen ninety eight Sir yes Sir members this just of the amendment pull the bill down back down to so that only deal with the percentages that Sir required to be or you're part of the assistance for the most agencies participate with the FAA only pay five percent the other code section here said ten percent so it takes it all the way back down to five percent similarly that were pretty much matches everything that sells that's out there other provisions in the bill that you all heard there was some discussion number one can you use income taxes to pay someone's real estate taxes so if you just want to think about it this way income taxes tax use an individual property taxes attached to the property and so I'm not sure how constitutional that would be in and so on our side we strip that down and got back to the meat I think of what the counties were looking for that was a add to drop that percentage of repayment back from ten to five percent. Thank you merge any questions. Everybody I speak against currents. Is less velocity backers molecules because. Really happy with me I must do pass on current member. President Micromax motion currents anybody all in favor say aye hi. Constructors right down to Senate bill forty four. Members we've been looking at this bill for quite awhile it was actually a lot more in depth we were trying to look at applying the thirty day rule for those folks that were working side the state of Arkansas right now if you work inside state of Arkansas you pay for the day that you work in Arkansas so just say someone's contract labor in Texas they work one day or not contraband to be too employee base at Texas a work one day in Arkansas they actually would have to figure out of computer axes and pay income taxes for that one day of work in Arkansas that all became a little too confusing in our discussions with the efface the bowl they're the bill was stripped back down so that it only dealt with the question that was created because of the if a legal opinion that was issued in February of twenty twenty so right so it's relatively new which said essentially that if there's an employer in Arkansas company based Arkansan The employing someone outside the State of Arkansas that the individual with income tax in the state of Arkansas there are only a handful of states that do that I think six in total we would have been seven roughly somewhere in that ballpark and so with this goes back to an bis puts back in place what was always been thought of which is you pay income tax in the state that you live now if you're doing work in Arkansas you played like physically in Arkansas you pay your taxes in Arkansas but if you're a moat worker working for a company based of Arkansas you'll owe taxes in that on state with that we need to clear that up sooner than later because again that rule was relatively new and you think you all understand it if we were to start collecting on that and we did try to decide to fix it later on that's when you had a more of a significant revenue impact we want to come to get ahead of it in and get ourselves back in line with the vast majority of other states. Thanks members questions. Anybody else will speak against the bill for the bill Russian dismaying I'm a star Senator Dismang oppose the bill insert the. Motion from a review macro do pass the debate all in favor say aye. Those graduation I will back up to House Bill sixteen ninety eight I just been told that we had sent to amendments to concur in not just want so the senator actually touched on both amendments so we took a motion for amendment number one that was J. L. L. two eighty one so can I have a motion Kerr on Senate bill J. L. L. two eighty five Germanised or Sam okay the most representative group anybody members. Lows thanks Sir Richard thanks chairman thank you members members as going to wrap up the good yours work Senate president everybody's attention I know For the most part I think we had better understand tennis most well way through so I appreciate that as kind of the newness for several years and took little get to see that very much so long story short it speaks volume for this committee and the membership of this committee and I certainly appreciate you