Committee hears bill to recognize gold and silver as legal tender, exempt transactions from state tax rules

Senate Assessment and Taxation Committee members heard testimony on Senate Bill 39, introduced as the "Kansas Legal Tender Act," which would recognize certain gold and silver coins and refined bullion as legal tender in Kansas and remove state taxation and characterization of such specie as personal property.

The bill, summarized by committee staff member Amelia, would define "specie" as coins having gold or silver content or refined gold or silver bullion that has been coined, stamped, or imprinted with weight and purity and “valued primarily based on its metal content and not on its form.” Amelia said the bill would also specify that the sale, purchase or exchange of one form of specie for another would not give rise to any tax liability, except for taxable distributions from retirement plans, and that Section 7 would amend a provision cited as 79 32 1 17 to allow taxpayers to subtract any net gain from sale of specie for Kansas adjusted gross income, again excluding retirement distributions.

Why it matters: proponents said the measure would enable people to hold and spend specie using modern payment tools without generating state capital‑gains tax exposure on routine transactions. Senator Michael Murphy and several outside speakers described technologies that make gold and silver spendable in everyday transactions and urged the committee to advance the bill. John Axtell, volunteer coordinator for the Kansas Campaign for Liberty, framed the measure as restoring a constitutional option and removing punitive taxation from specie transactions. Economist Kevin Freeman and conferee Mike Carter further urged passage, arguing the bill would protect purchasing power and broaden options for small savers.

During questions, Senator Corson asked whether retailers could decline specie as payment; the committee was told the bill’s language is intended to preserve voluntary exchanges. Senator Schellenberger raised the Department of Revenue fiscal note, noting an estimated $200,000 delta; proponents said the fiscal estimate likely undercounts unreported or informal transactions and that broader effects are uncertain.

No technical payment infrastructure or regulatory detail beyond the bill text was adopted by the committee during the hearing. The bill text states the attorney general would have authority to enforce the act, and that no person could compel another to tender or accept specie unless provided by statute or contract. The bill, if enacted, would take effect upon publication in the statute book.

The committee later moved to advance the bill out of committee. Senator Starnes moved and Senator Owens seconded a motion to report the bill favorably; the motion carried.