Constitutional Tender: Utah Governor Signs Gold & Silver Legal Tender Bill!
The Constitutional Tender organization heralded the signing of the the Legal Tender Act into law occasioned by Utah Governor Gary Herbert's signing of the bill on Friday, March 25, 2011 marking the official passage of the measure into Utah law.
The law recognizes gold and silver coins issued by the federal government as legal currency in the state. The coins do not replace the current paper currency, but may be used and accepted voluntarily as an alternative.
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Gold and silver coins issued by the federal government are already legal tender, of course, and can be used to purchase items and pay debts owed. However, they could only be used at the face value of the coins -- which is ridiculously lower than the value of the precious metal content of the coins. If you were to use them at the actual value of the coins, you would face a capital gains tax on the "profit" you gained over the face value.
If nothing else, this law recognizes the inanity of imposing a tax on exchanging one form of legal tender currency for another. By removing that tax and officially recognizing the legal tender status of the gold and silver coins within the State of Utah, the way is now open for good and services to be priced in both Federal Reserve Notes denominations and Gold & Silver Coins denominations; likewise, banks should now be free to offer their customers accounts denominated in legal tender gold & silver coins, so that consumers will be able to make purchases based on those accounts, using their debit cards, checks, ATM cards, etc. Banks should also easily convert FRNs to Gold & Silver Coins and vice-versa, since they will now be treated as simple currency exchanges.