You swipe the card. The screen blinks green. The bag of groceries is yours. Milk, bread, coffee, a rotisserie chicken. Somewhere behind that beep, the system just sold a sliver of your gold.
You didn't feel it leave. But it left.
Texas Governor Greg Abbott signed House Bill 1056 into law on June 22, 2025. It was the headline gold bugs had waited for. The state built a system where your gold and silver sit in the Texas Bullion Depository. Backed one-to-one. You spend them with a card. Swipe or tap. The system converts your metal to dollars at the point of sale using real-time prices. You buy gas. You buy groceries. You shop online with gold in your account instead of a checking account. No other state has built anything like it.
I wanted it to work. I think you did too.
Here's what nobody put on the flyer. The IRS does not care what Texas calls your gold. The state says it's money. The feds say it's a collectible, same shelf as baseball cards and antique rugs. That word has not changed. Not by one letter. When the Texas system converts your gold to dollars at the register, the IRS sees a sale. Not a currency swap. A sale of a collectible. And sales have gains. And gains have taxes.
The rate on collectibles is capped at 28% federal. If your income crosses $250,000 married, you owe another 3.8% on top of that. That's 31.8%. On groceries.
Say you bought 10 ounces of gold back in 2020 at $1,800 an ounce. That's $18,000 out of your pocket. Gold now sits around $4,500 an ounce. Your stack is worth $45,000. Good for you. You were right. But the moment you spend it through that card, the IRS sees $27,000 in gains. At 31.8%, you owe $8,586 in federal taxes. For buying chicken and coffee.
And nobody sends you a notice. Gold and Silver American Eagle coins are exempt from 1099-B reporting. No form shows up in January. No broker flags it. But the tax is still yours. The burden falls on you, the taxpayer. Miss it and you've got a problem you didn't know you built.
I kept waiting for someone to fix this. The One Big Beautiful Bill Act passed through Congress this year. It kept the 28% collectibles rate and the 3.8% surtax locked through 2028. No relief. They didn't change what the feds call your gold. Not one word. The door stayed shut.
So the card sits in a drawer. You own the gold. You don't spend it. You wait. That might be the right move.
Do NOT Buy SpaceX Before Seeing this
CNBC called it “the big market event of 2026.”
The New York Times called it “a generational moneymaking event.”
And Barron’s says it “could be a feast for investors in 2026.”
Of course, I’m talking about the SpaceX IPO…
Which is now scheduled for June 12.
But I urge you…
There is one clean exit. It's a hard one to talk about. When you die, your heirs get a step-up in basis. The cost resets to what the gold is worth that day. The gain vanishes. The 31.8% vanishes. Your kids sell the coins and owe little or nothing on the growth you spent decades building.
The cleanest way to pass your gold to your family without the tax bite is to never spend it yourself.
I keep thinking about that card. The beep. The green screen. The bag of groceries. The $8,586 you never saw coming.
The state gave you a door. The feds painted it on the wall.
H.L.
