United Precious Metals Association
The United Precious Metals Association (UPMA) is a Utah-based non-profit dedicated to offering its members gold and/or silver denominated accounts.[1] UPMA was founded shortly after the passage of the Utah Legal Tender Act in 2011. This Act explicitly recognizes the circulation of U.S-minted legal tender gold and silver coins as a non-taxable event.[2] Utah was the first State in the Union to formally adopt such legislation.[3]
Background[edit]
Between 1933 and 1974[4] American citizens could not legally own gold, with some exceptions. It was not until 1985 that the U.S. Treasury began minting Gold and Silver Eagle Coins after the multi-decade moratorium. While the sale of collectors' bullion and "proof" coinage did not altogether cease during this period, there were few convenient (or legal) ways for the average person to acquire or circulate specie in the United States. Article 1 §10 on the United States Constitution mandates that "No state shall...make anything but gold and silver coin a tender in payment of debts."[5] This provision, while not explicitly forbidding the use of non-specie tender at the Federal level, at least reserves the States' right to adhere to a Gold Standard, regardless of whatever form the national currency happens to take. However, this would have been especially difficult prior to the passing of the Gold Bullion Coin Act,[6] when neither the Federal Government nor the States were mass-producing coinage intended for circulation. Since the start of modern production, the US Mint has cast over 25 million troy ounces of gold and over 500 million ounces of silver into specie dollars.[citation needed]
Despite this revitalization of traditional gold and silver money, there was little effort made by financial institutions to capitalize on this corner of the market. This all changed in 2011 when Utah became the first State to officially and explicitly recognize precious metal coins as a legitimate form of money.[7] The original proposal was drafted by Lawrence Hilton Esq., an insurance lawyer and Sound Money advocate from Utah County, and championed in the legislature by Rep. Brad Galvez. Shortly thereafter, Mr. Hilton began organizing what would later become the United Precious Metals Association.
Business model[edit]
UPMA is distinct among precious metals dealers, as it operates on a 0% Buy-Sell Spread.[8] Basically, if a member buys a volume of gold or silver from UPMA, they can immediately sell it back to the Association at the same price (currently around 5.8% above spot price for gold and 20% above spot for silver). Most coin dealers (like any business) charge a premium on the way in and take a cut on the way out. UPMA's status as a member-owned non-profit allows them to operate with very little overhead and maximum value retention for the buyer/seller.
UPMA is also distinct in their exclusive use of Specie Legal Tender.[9] This niche family of precious metals comprises American Gold/Silver Eagles and Gold Buffalo Coins. Essentially, if a coin is made of gold or silver and has the word "Dollar" on it, you can keep it in a UPMA account. Unlike bullion coins, bars or chips, these coins are considered legal money by the Federal Government, and therefore do not generate a capital gain when used as a medium of exchange. This makes them less financially cumbersome as a monetary asset than other forms of commodity money, cryptocurrency, or any other physical or digital item which may be considered taxable property.
Specie dollar conversion[edit]
Since at least 1900, it has been the prerogative of the Secretary of the Treasury to "maintain the parity of all forms of money issued or coined by the United States.[10] This implies that all forms of the US Dollar (paper, gold, digital, etc.) should have the same purchasing power and that this parity of value should be enforced by the government. However, this is not the case, as there are no less than six different "flavors" of the dollar currently in existence: Gold, Silver, Platinum, Palladium, the Federal Reserve Note and its digital equivalent (often treated differently at the merchant level because of processing fees which must be factored into any transaction). Because of the differing face values and fluctuating market prices of each of the Specie Dollar coins, as well as the steadily depreciating value of the paper dollar, the ratios between the "Sound Money" coins and the "Fiat" dollars in the average wallet stand thusly;[11]
Gold-to-Paper - 26:1 Silver-to-Paper - 18:1 Platinum-to-Paper - 8:1 Palladium-to-Paper - 50:1
While current US District Court precedent tells us that "a dollar is a dollar"[12] regardless of whatever intrinsic, metallurgic or "melt" value one coin may have over another, this ruling has proven impractical to enforce between consenting, private parties. Put simply, any two individuals or entities can agree between themselves on the value of their money, whether that money is a piece of paper, a precious metal coin, or even a giant disk of stone, and no governing body cannot interfere in that transaction, unless there is a taxable gain of value by one or both parties. Specie Legal Tender is distinct in that, because it is created by the State and branded as money, it is exempt from taxable appreciation, as long as it is being used as the medium (not the commodity) of the transaction. If the Federal Reserve Note tripled in value tomorrow, it would be nonsensical for the IRS to tax every citizen on that "gain." The same is true in regard to other forms of legal US currency. If one exchanges 1,000 Silver Dollars for a used car, that is not a trade: it is a purchase.
Notable, the U.S. Mint passively acknowledges this disparity by "selling" Specie Dollars for their melt value,[13] seemingly in contradiction to the notion that there are not, in fact, multiple parallel currencies circulating within the United States.
Gold and silver accounts[edit]
UPMA accounts are not only funded entirely with gold and silver coins; they are also denominated in Gold and Silver Dollars. For example, if a member owns an ounce of gold (currently valued around $1300), their gold balance will read "$50," because a 1-oz gold Eagle coin has a $50 face value. If the member also owns $1300 worth of silver, their silver balance will be "$72," since one Silver Dollar is worth around $18 in paper. With this in mind, UPMA's fee schedule is roughly as follows;[14]
| Weight | Face Value | USD Value | Cost in Gold | Cost in USD | Percentage |
|---|---|---|---|---|---|
| Less than 0.02 oz* | $0 - $1 | $0 - $26 | Free | Free | 0% |
| 0.02 - 2 oz | $1-$100 | $26 - $2,600 | $0.10 | $2.60 flat† | 10% - 0.01% |
| 2 - 40 oz | $100-$2,000 | $2,500 - $52,000 | $0.02 | $0.26 per coin | 0.02% |
| More than 40 oz | $2,000+ | $52,000+ | $0.01 | $0.12 per coin‡ | 0.01% |
*Accounts can hold any fractional dollar value, as whole coins are not allocated to any particular member.
†The flat-rate is charged on top of the per-coin rates for higher-value accounts.
‡Ounces 2-50 are always billed at the $0.25 per coin rate.
| Weight | Face Value | USD Value | Cost in Silver | Cost in USD | Percentage |
|---|---|---|---|---|---|
| Less than 1 oz | $0 - $1 | $0 - $18 | Free | Free | 0% |
| More than 1 oz | $1+ | $18+ | $0.05 | $0.01 per coin | 0.05% |
Members can withdraw or liquidate their gold or silver at any time, at no charge. Members can also convert gold to silver, or silver to gold (for a 1% fee) or make transfers between accounts (for a 2% fee). UPMA allows members to fund their accounts with cash, cryptocurrency, gold/silver bullion, or private reserves of Gold/Silver Specie (Dollars). All metals are fully insured against loss, theft or damages, and held on 100% reserve with Quintric Holdings Inc.
Ongoing lobbying efforts[edit]
The founders of UPMA have continued pushing for legalization or recognition of precious metals as a monetary substance since the organization's inception. As the business of vaulting and transacting with Specie Legal Tender increases in popularity, more States have begun adopting laws that either relax restrictions on circulation, remove taxes or fully embrace gold and silver as money. The following are examples of States which have new Sound Money legislation on the books;
- April 2013: South Carolina eliminates sales tax on precious metals[15]
- May 2013: Florida eliminates sales tax on precious metals[16]
- 2013: Texas eliminates sales tax on precious metals[17]
- April 2014: Nebraska eliminates sales tax on precious metals[18]
- April 2014: Oklahoma eliminates sales tax on precious metals[19]
- May 2016: Ohio eliminates sales tax on investment metals[20]
- July 2016: Indiana eliminates sales tax on precious metals[21]
- February 2017: Virginia enacts provisional tax exemption for sales of precious metals[22]
- May 2017: Arizona eliminates capital gains tax on gold and silver coin[23]
- May 2017: Minnesota eliminates sales tax on precious metals[24]
- July 2017: North Carolina eliminates sales tax on investment coins[25]
- March 2018: Alabama eliminates sales tax on precious metals[26]
- June 2017: Louisiana eliminates sales tax on precious metals[27]
- 2018: Wyoming eliminates sales tax on gold and silver coin[28]
- 2018: Idaho eliminates sales tax on precious metals[29]
- June 2018: Texas opens the first State-operated bullion depository[30]
- March 2019: West Virginia eliminates sales tax on investment metals[31]
Colorado, Connecticut, Georgia, Illinois, Iowa, Maryland, Massachusetts, Michigan, Missouri, Nevada, New York, North Dakota, Pennsylvania, Rhode Island, South Dakota and Washington State have laws of a similar nature which predate the modern Sound Money Movement.[32]
References[edit]
- ↑ "UPMA". upma.org. Retrieved 2016-12-19.
- ↑ "Utah Legislature HB0317S01". le.utah.gov. Retrieved 2016-12-19.
- ↑ Yardley, William (2011-05-29). "Utah Law Encourages Gold and Silver Coin Use". The New York Times. ISSN 0362-4331. Retrieved 2016-12-20.
- ↑ Fulbright, James (1974-08-14). "S.2665 - 93rd Congress (1973-1974): An Act to provide for increased participation by the United States in the International Development Association and to permit United States citizens to purchase, hold, sell, or otherwise deal with gold in the United States or abroad". www.congress.gov. Retrieved 2019-05-04.
- ↑ Staff, L. I. I. (2009-11-12). "Article I". LII / Legal Information Institute. Retrieved 2019-05-04.
- ↑ Exon, J. James (1985-12-17). "S.1639 - 99th Congress (1985-1986): Gold Bullion Coin Act of 1985". www.congress.gov. Retrieved 2019-05-04.
- ↑ "Utah Legislature HB0317S01". le.utah.gov. Retrieved 2019-05-04.
- ↑ "0% buy/Sell Spread". United Precious Metals Association. Retrieved 2019-05-04.
- ↑ "Legal Tender Gold & Silver". United Precious Metals Association. Retrieved 2019-05-04.
- ↑ www2.econ.iastate.edu https://www2.econ.iastate.edu/classes/econ355/choi/1900mar14.html. Retrieved 2019-05-04. Missing or empty
|title=(help) - ↑ "Historical London Fix Prices 2019 | Kitco". www.kitco.com. Retrieved 2019-05-04.
- ↑ "Crummey v. Klein Independent Sch. Dist, 295 Fed. Appx. 625 | Casetext". casetext.com. Retrieved 2019-05-04.
- ↑ "Gold Coins". United States Mint. Retrieved 2019-05-04.
- ↑ "Fee Schedule". United Precious Metals Association. Retrieved 2019-05-04.
- ↑ "Code of Laws - Title 12 - Chapter 36 - South Carolina Sales And Use Tax Act". www.scstatehouse.gov. Retrieved 2019-05-04.
- ↑ "12A-1.0371 : Sales of Coins, Currency, or Bullion - Florida Administrative Rules, Law, Code, Register - FAC, FAR, eRulemaking". www.flrules.org. Retrieved 2019-05-04.
- ↑ "83(R) HB 78 - Engrossed version - Bill Analysis". capitol.texas.gov. Retrieved 2019-05-04.
- ↑ "Gold & Silver Bullion Laws in Nebraska". www.soundmoneydefense.org. Retrieved 2019-05-04.
- ↑ "Gold & Silver Bullion Laws in Oklahoma". www.soundmoneydefense.org. Retrieved 2019-05-04.
- ↑ "Senate Bill 172 - Status | The Ohio Legislature". www.legislature.ohio.gov. Retrieved 2019-05-04.
- ↑ "Gold & Silver Bullion Laws in Indiana". www.soundmoneydefense.org. Retrieved 2019-05-04.
- ↑ "Gold & Silver Bullion Laws in Virginia". www.soundmoneydefense.org. Retrieved 2019-05-04.
- ↑ "42-5061 - Retail classification; definitions". www.azleg.gov. Retrieved 2019-05-04.
- ↑ "Minnesota Senate Bill Summary H.F. 1First Special Session - 2017". www.senate.mn. Retrieved 2019-05-04.
- ↑ "North Carolina H434 | 2017-2018 | Regular Session". LegiScan. Retrieved 2019-05-04.
- ↑ "Alabama SB156 | 2018 | Regular Session". LegiScan. Retrieved 2019-05-04.
- ↑ "Gold & Silver Bullion Laws in Louisiana". www.soundmoneydefense.org. Retrieved 2019-05-04.
- ↑ "Wyoming HB0103 | 2018 | Budget Session". LegiScan. Retrieved 2019-05-04.
- ↑ "Section 63-3622V – Idaho State Legislature". Retrieved 2019-05-04.
- ↑ "Homepage - Texas Bullion Depository". www.texasbulliondepository.gov. Retrieved 2019-05-04.
- ↑ "West Virginia Legislature Votes to End Sales Taxation on Gold & Silver". Money Metals Exchange. 2019-03-08. Retrieved 2019-05-04.
- ↑ "Gold & Silver Bullion Laws". www.soundmoneydefense.org. Retrieved 2019-05-04.
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