Background

Texas has passed a groundbreaking law (HB 1056) recognizing gold and silver as legal tender starting September 1, 2026.

It also introduced a state-backed digital system by 2027 that will allow citizens to spend gold and silver using debit cards or a mobile app linked to the Texas Bullion Depository. This dual development aims to modernize precious metals as currency and increase financial flexibility for Texans.

• The law defines "specie" as gold and silver stamped with weight and purity, and does not require these items to be government-issued, though they cannot resemble U.S. coins.

• The main innovation is the mandate for the Texas Comptroller to create an electronic payment platform allowing Texans to deposit precious metals into the existing Texas Bullion Depository and link them to a debit card or app for everyday purchases.

• The system will convert the market value of gold or silver into dollars at the point of sale, making gold spending as simple as swiping or tapping a card.

• Legal tender status takes effect in September 2026 with the associated official state payment app planned to launch later in 2027.

• Lonestar already has all the features that will be in the official state app but is available now.

Tax Documentation and Capital Gains

• Because each sale of gold or silver could result in a taxable event (potential capital gain or loss), the official state app and Lonestar provide detailed statements showing the original acquisition value and sale price for each transaction.

• Users will need these records to determine any capital gains or losses, for reporting when filing federal taxes.

• The system may generate annual tax documents similar to brokerage 1099-B forms, streamlining the reporting process for users.

Accounting System Integration

• All transactions will be recorded in electronic ledgers and journals, following established accounting standards to show assets, debits, credits, and income or loss from precious metal sales.

• Accurate documentation will help ensure compliance, facilitate audits, and provide transparency for both individuals and businesses.

• The system’s digital nature means that users can easily download their data for use in tax preparation and personal or business accounting software.

Businesses that accept gold payments for goods or services will record these sales in their accounting ledgers similarly to credit card transactions, with important adjustments for documentation and IRS compliance related to the underlying precious metal conversion.

• The sale is recorded as revenue in the business ledger just like a regular debit/credit card sale.