Bill Description: House Bill 256 requires all businesses in the state to accept cash as a method of payment.
Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?
House Bill 256 amends Section 62-3620, Idaho Code, by adding a new subsection (h), which says, "A person who engages in business as a seller in this state shall accept cash as a method of payment along with any other methods of payment the seller may accept." Within the context of this statute, a seller is a "retailer engaged in business in this state" who has been issued a seller's permit.
Regulating money is one of the few powers explicitly granted to the federal government under Section 8 of the U.S. Constitution. Specifically, the federal government is granted the power to "coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." It is likewise empowered to "provide for the punishment of counterfeiting the securities and current coin of the United States."
States, on the other hand, are constitutionally forbidden to "coin money" or "make any thing but gold and silver coin a tender in payment of debts."
The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," states, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
The U.S. Department of the Treasury addresses this requirement as it relates to private businesses opting not to accept cash.
"This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy."
While the federal government has constitutional authority to coin and regulate currency, it is left to the states to determine if private businesses are required to accept cash.
By requiring sellers to accept cash, House Bill 256 may serve to protect the privacy of buyers. Were this privacy exclusively from credit card companies or merchants, it would not be a matter of individual liberty, but it goes far beyond that. It was revealed in 2013 that the widespread and warrantless data monitoring by the NSA included not just mobile phone metadata — the most widely reported target — but credit and debit card transactions as well.
Does protecting individual privacy from unconstitutional surveillance constitute a compelling government interest for the state of Idaho? Does it outweigh the harm done to businesses by the imposition of a new regulation?
The answers to these questions likely depends on your principles regarding the proper role of government. Protecting individual privacy is a positive intention, but should it require compromising other principles, such as the freedom of a business to decide which forms of payment it will accept?
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
By requiring sellers to accept cash, House Bill 256 imposes a potentially costly regulation on sellers. In addition to the possible costs and inconveniences of accepting cash, certain business models may be built specifically around alternative methods of payment, such as mobile apps or cryptocurrencies. This new regulation could effectively shut down such businesses.
It is unclear if this new subsection applies only to businesses in which a buyer directly interacts with another person acting as the seller, or if it applies to any business owned or operated by a person (which legally includes a corporation). If it is the latter (which seems likely), this regulation would effectively outlaw vending machines or kiosk payment systems that do not accept cash.
It is also unclear how this law would apply to delivery businesses since cash-on-delivery has been largely discontinued as impractical and unsafe.
As discussed above, there is some value in protecting the privacy of Idahoans, but that must be weighed against the harm of new regulation. This law has the potential to burden existing businesses and stifle future innovation, especially as it is written without any exceptions for businesses on which the restriction would impose an undue hardship.