JUNEAU — In the final days of the legislative session, the Alaska House passed a bill that would allow gold and silver to be used as legal tender.
House Bill 3, introduced by Big Lake Republican Rep. Kevin McCabe, would allow business owners to decide if they want to accept the precious metals as currency. The coin or bar would need to be refined and its value would need to be authenticated, meaning gold dust or nuggets could not be used.
McCabe told the House State Affairs Committee earlier in the session that one of his constituents suggested the idea to him because they did not trust the national banking system. More than 10 states have passed similar bills, including Arkansas in April.
The bill specifically exempts local governments from collecting sales tax when U.S. dollars are exchanged for gold and silver. Sales taxes on purchases made with the bullion would still apply.
The use of gold and silver as currency would also still attract federal capital gains tax. If their value increased between the time when they were bought and sold, the user could be guilty of tax evasion if they did not report that income.
States such as Wyoming and Utah have used Goldback, Inc. to design their gold bills, which are then produced by Oregon-based company Valaurum. McCabe showed examples of the other states’ gold bills during a committee hearing and suggested that the Alaska Arts Council could design a local version.
If the measure passes the Senate, a joint legislative committee would be tasked with studying alternative currencies that could be adopted and used in Alaska.
The Sound Money Defense League, a national organization that describes itself as being laser focused on “restoring gold and silver to its historic role as America’s constitutional money,” has supported states across the nation to pass similar bills. Policy director JP Cortez told Alaska lawmakers that waiving taxes on gold and silver would remove disincentives for their use, and that bullion was a good option to avoid the effects of inflation.
HB 3 attracted opposition from Democrats and independents in the House on Thursday. Rep. Rebecca Himschoot, a Sitka independent, said she opposed the bill because it would restrict local communities’ abilities to tax themselves.
The House bill advanced to the Senate on a 25-15 vote Thursday, with opposition coming from members of the Democrat-dominated minority caucus. The regular legislative session must end by midnight next Wednesday.