Multnomah County offers tax evaders an easy out

Today’s Whimperer reported that Sam del Castillo, a Multnomah County resident unhappy with the county’s personal income tax, plans to pay his tax with 334 separate checks, most for $1.  The county’s bank will charge the county $26.72 to process the checks.  The story notes that the county imposed some payment rules to discourage similar protesters:

In recent months, the county created four payment rules to discourage mischief-makers, such as the guy who offered county tax collectors a sack of 40,000 pennies or the man who unloaded a mound of $1 bills to pay the tax last year. Now, no more than $10 worth of coins will be accepted, and no more than $100 in $1 bills is allowed.

I’m guessing that the county tax people didn’t run these rules by county counsel, or think about the meaning of the fine print on the obverse of the $1 bill: "This note is legal tender for all debts, public and private."  If they had checked with the lawyers, they would have learned that their rules violate federal law, not a safe thing for even a local government to do.

What is "legal tender"?  Money is "legal tender" if, when you offer it to someone in payment of a debt, the person has to accept it in payment or at least acknowledge that you offered to pay the debt.  (The preceding is a shorthand explanation and not legal advice.)  This doesn’t mean that stores have to accept your $100 bill for your $3 purchase; they’re free to refuse to sell you the merchandise.  But if you owe the store $3 from last month’s purchase and bring in a $100 bill to pay your debt, the store has to accept it.  (Warning: the store doesn’t have to give you any change for your C-note.)  But let’s let the United States Treasury explain the concept in its own words:

[The Coinage Act of 1965] says that: "All coins and currencies of the United States, regardless of when coined or issued, shall be legal-tender for all debts, public and private, public charges, taxes, duties and dues."

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.

I think this means that anyone who goes in to the county with enough $1 bills to pay the tax, and offers them in payment, can’t be charged with failing to pay the tax or hit with a late fee or interest.  The person would still owe the tax, but would have offered legal payment before the due date, and could plead the Coinage Act as a defense to a charge of non-payment.  (This is not legal advice, and you try it at your own risk.)

Federal law overrides minor policy decisions of county officials, even (the last I heard) in Multnomah County, Oregon.  Let’s see whether anyone at the county owns up to this faux pas by the close of business on Tax Day tomorrow.