More States Are Turning to Gold and Silver Currency
With more states embracing specie alongside fiat currency, the question is no longer whether it can work—but whether broader adoption follows.
Is it possible some states are seeing something the federal government is ignoring? Alaska has just joined a growing list of states where gold and silver currency is legal tender, as well as being exempt from sales tax.
In numismatic terms, what this means is that specie is once more acceptable as currency, running alongside our fiat money national system of base metal coins and paper money. Retail stores have the option but are not required to accept specie. Individual municipalities are prohibited from levying a sales tax on gold or silver specie purchases or from taxing it when specie is used as a currency.
Coin collectors and those individuals buying bullion coins need to be aware that a gold coin, as a collectible with a value above the intrinsic cost of the gold, will still be liable for taxes on any additional “collectible” value. Incidentally, Alaska has 152 sales tax divisions!
The growing list of states in which specie has been recently declared to be legal tender includes Arizona, Colorado, Florida, Kansas, Louisiana, Oklahoma, Texas, Utah, West Virginia, and Wyoming. The constitutional power to issue our currency still belongs to Congress. States in which there are legal tender laws allowing specie to be treated as an equal to Federal Reserve notes have the advantage of allowing their so-called currencies to be a hedge against inflation, as well as to remove the burden of state taxes or seizure.
Likely, the bigger question still looming is just how widespread the use of specie will become in these states? Obviously, due to the fluctuations in the spot price of gold and silver, transactions involving this specie are going to have to be adjusted to their intrinsic values at the moment of that transaction. This should be interesting, but from a coin collector’s standpoint, it’s overdue.
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