JEFFERSON CITY, Mo. (May 1, 2025) – Today, the Missouri Senate passed the Constitutional Money Act, a bill that would treat gold and silver as legal tender and eliminate state capital gains tax on the same.
The proposed law would recognize gold and silver as legal tender and make them receivable in payment of all debts contracted for in the state of Missouri. It would also permit any entity doing business in this state to compensate its employees, in full or in part, in the dollar equivalent of specie legal tender.
Sen. Mike Moon successfully had the Constitutional Money Act language amended to House Bill 754 (HB754), which passed the Senate by a 21-10 vote. On May 1, the full bill cleared the Senate by a 20-11 vote. It will now have to go back to the House for concurrence with the amendments.
The state would be required to accept gold and silver in electronic form for the payment of public debts. Private debts could be settled with gold or silver in physical or electronic form at the parties’ discretion.
The Director of the Department of Revenue would be tasked with “promulgating rules on the methods of acceptance of specie legal tender as payment for any debt, tax, fee, or obligation owed.”
The enactment of the measure would make Missouri the eighth state to recognize gold and silver as legal tender, as they always should have been doing. Utah led the way, reestablishing constitutional money in 2011. Wyoming, Oklahoma, Arkansas, Louisiana, Idaho, and Alabama have since joined.
IN PRACTICE
This would allow Missouri residents to use gold or silver in physical or electronic form as money rather than as mere investment vehicles.
Article I, Section 10 of the Constitution for the United States expressly prohibits states from [making] “any Thing but gold and silver Coin a Tender in Payment of Debts.” Virtually all debts in Missouri are either paid with Federal Reserve Notes (dollars), which were authorized as legal tender by Congress, or with coins issued by the U.S. Treasury – very few of which have gold or silver in them.
The Federal Reserve destroys this constitutional monetary system by creating a monetary monopoly based on its fiat paper currency. Without the backing of gold or silver, the central bank can easily create money out of thin air.
Passage of the Constitutional Money Act would represent a big first step against this fiat-based Federal Reserve system by creating a foundation to pull the rug out from under it on the state and local levels. In essence, it would set the stage for the people themselves to undermine the Federal Reserve monopoly by introducing competition into the monetary system.
The next step would be for people to start taking advantage of the status of gold and silver as money by using both as such instead of Federal Reserve notes.
The effect has been most dramatic in Utah where the Specie Legal Tender Act opened the door for the development of a robust gold and silver economy in the state. With some legal hurdles cleared away by the act, the United Precious Metal Association (UPMA) in partnership with Alpine Gold Exchange set up the state’s first “gold bank.”
The act also led to the creation of the Goldback, a local, voluntary medium of exchange. Goldbacks are notes made from fractions of an ounce of physical gold. The company created a process that turns pure gold into a spendable physical form for small transactions.
New Hampshire also boasts a thriving gold and silver economy. While the state does not officially recognize bullion as legal tender, this has not deterred thousands of residents from using it in private transactions. Because there are no state tax barriers on precious metals, a favorable tax climate – combined with a population willing to embrace sound money – has positioned New Hampshire as another model for others to follow.
REMOVING TAXES
HB754 would also exempt the sale of gold and silver bullion from the state’s capital gains tax.
Missouri does not levy sales tax on gold and silver bullion. Exempting the sale of bullion from capital gains taxes takes another step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.
Imagine if the IRS sent you a bill every time the dollar strengthened against the euro. That’s effectively what capital gains taxes on gold and silver do. As the precious metals prices go up due to the devaluation of the dollar, the government levies a tax on you. It is essentially a tax on the superior performance of gold and silver as money.
“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support of an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.
GOLD CONTRACT CLAUSE
Beyond the provisions to make gold and silver legal tender, HB754 includes language recognizing gold or silver contract clauses.
“Except as expressly provided by contract, no person or entity shall be required to use specie legal tender or electronic specie currency in the payment of any debt and nothing in this section shall prohibit the use of federal reserve notes in the payment of any debt.”
In practice, including this contract clause means that if parties voluntarily agree to be paid, or to pay, in gold and silver coin or bullion, the Missouri courts could not substitute any other thing, e.g., Federal Reserve Notes, as payment.
The principle behind a gold clause contract is simple. It requires that payment must be made in a specific amount of gold or its paper equivalent. For example, a mortgage might stipulate that repayment must be in the form of 30 ounces of gold. Gold clauses protect the parties to a contract from currency debasement and incentivize the use of sound money.
FEDERAL CONFISCATION SCHEMES
HB754 includes provisions prohibiting any state or local cooperation with federal actions to confiscate gold or silver or that interfere with a person’s right to use legal tender in Missouri.
“Under no circumstance shall the state of Missouri or any department, agency, court, political subdivision, or instrumentality thereof enforce or attempt to enforce any federal acts, laws, executive orders, administrative orders, rules, regulations, statutes, or ordinances infringing on the right of a person to keep and use specie legal tender and electronic currency as provided in this section.”
The provisions prohibiting the state from enforcing or implementing certain federal acts rest on a well-established legal principle known as the anti-commandeering doctrine. Simply put, the federal government cannot force states to help implement or enforce any federal act or program – whether constitutional or not. The anti-commandeering doctrine is based primarily on five Supreme Court cases dating back to 1842.
Based on James Madison’s four-step blueprint for states and individuals to stop federal programs, using a “refusal to cooperate with officers of the Union” provides an extremely effective method to render federal laws unenforceable in practice because most enforcement actions rely on material support from the states.
WHAT’S NEXT
Since the Constitutional Money Act was amended to a bill that has already passed the House, the legislation will have to go back to the House for concurrence with the amendments. It must pass the full House by a majority vote.
