Utah Gov. Gary Herbert last week quietly signed a law which has made Utah the first U.S. state to recognize federally issued gold and silver coins as legal tender.
However, the governor chose not to make any public statement about the Utah Legal Tender Act.
Utah’s state tax code now considers U.S. Mint gold and silver coins as currency, which means no capital gains or other state taxes will be levied when the coins are exchanged. However, the gold and silver coins are still only worth their face value despite record gold and silver prices.
A person only identified as close to Herbert told CNN, “If somebody is stupid enough that they want to buy a Snickers bar at 7-Eleven with a gold coin worth thousands of dollars, they will be able to do that.”
Larry Hilton, an attorney and insurance salesman who authored the Utah Sound Money Act, said eliminating taxes on the exchange of the gold and silver coins places them in the same playing field as paper currency. However, federal taxes still apply. The law also does not apply to foreign minted gold coins.
He told the Salt Lake Tribune last December that the Utah Sound Money Act is “not intended to be compulsory in any way. The state is offering to taxpayers, “If you want to pay your taxes in gold and silver, we’ll accept them.”
James West, publisher of the Midas Lettter, Wednesday called Utah Sound Money Act “a shot at the Federal Reserve. And Utah isn’t alone. A few other states are considering similar bills.”
“Conservatives fret that the central bank has permanently damaged the value of the dollar by pumping trillions into the economy, drawing down the greenback’s buying power,” he observed. “And Utah – where the Tea Party has a powerful presence – is leading the charge against Fed Chairman Ben Bernanke.”
The Utah Sound Money Act was also promoted by Washington-based American Principles in Action, which is backing the Gold Standard 2012 program.