Brewer vetoes bill making gold legal tenderPosted: Updated:
PHOENIX (AP) -- Republican Gov. Jan Brewer vetoed a bill late Thursday that would have made Arizona the second state in the nation to recognize gold and silver as legal tender.
Brewer said she shared concerns with the measure's proponents about a declining dollar, but she said the proposal was sloppily put together and did not address basic issues such as how transactions using precious metals would be taxed.
"While I believe the concern over a devalued dollar as a result of an unsustainable federal deficit is justified, I am unable to support this legislation," she wrote in a letter to Senate President Andy Biggs. "I believe the provisions in this legislation need to be more carefully examined and there should be prior coordination with those government agencies tasked with the oversight of these transactions."
State officials had previously raised issues with the bill. It passed in the GOP-led House only after an amendment was added to exempt the Department of Revenue from having to accept precious metals as tax payments.
Brewer said it was unclear whether the state would have to exempt income tax related to a transaction involving precious metals under Senate Bill 1439. She said it could give businesses that buy and sell collectable coins an unfair tax advantage.
The bill would not have gone into effect until 2014. Republican Sen. Chester Crandell, the measure's sponsor, said he included the delay to give lawmakers time to craft and debate other bills next year that would implement the legislation.
Proponents said the measure would allow people to invest in gold and silver and not worry about the rise and fall of the dollar.
But critics blasted the effort as a far-right proposal that would only create confusion and chaos at the cash register as consumers and store clerks examined and weighed the precious metals. The bill would have let people use gold and silver as money as long as businesses agreed to take them.
"There's no reason for us to do this," Democratic Sen. Steve Farley told lawmakers during debate. "This is another one of those things that gets national press for us - and not in a good way."
Utah became the first state to allow gold or silver payments in 2011. Lawmakers in Minnesota, North Carolina, Idaho, South Carolina, Colorado and other states have debated copycat laws in recent years. The Maine Senate and House recently rejected a similar measure.
Gold-backed money fell out of favor during World War I because the U.S. and many other countries needed to print more cash to pay for the war. President Richard Nixon formally abandoned the gold standard in 1971.