For the first time since 1971, gold and silver are once again considered legal tender in at least one part of the United States.
The state of Utah passed the “Utah Legal Tender Act,” which “recognizes gold and silver coins that are issued by the federal government as legal tender in the state and exempts the exchange of the coins from certain types of state tax liability.”
The law, signed by Governor Gary Herbert on March 25, does not obligate individuals to pay or accept payment in precious metals, but rather provides an alternative to the fiat-based Federal Reserve note that central bankers have been recklessly creating out of thin air in unprecedented proportions in recent years.
The Utah Legal Tender Act also eliminates state taxes on the exchange of gold and silver coins, and instructs the legislature to study an “alternative form of legal tender.”
The most significant change from a practical perspective is that the Utah’s state tax code now considers gold and silver coins issued by the U.S. Mint as currency rather than an asset, which means that capital gains or other state taxes cannot be levied when the coins are exchanged. However, federal taxes still apply on these transactions.
A key point to note is that the “Utah Legal Tender Act” that passed is different from the “Utah Sound Money Act,” which sought to recognize gold and silver coins issued by certain foreign governments in addition to those minted by the U.S. government. Furthermore, the Sound Money Act would have required the state of Utah’s government to accept the coins as payment.