According to PMS-NBC it is a federal offense.
http://www.msnbc.msn.com/id/7148966/
If you are going to break a law, make it a federal one.
From the site -
Specifically, this is a violation of Title 18, Section 333 of the United States Code, which says that “whoever mutilates, cuts, disfigures, perforates, unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, Federal Reserve Bank, or Federal Reserve System, with intent to render such item(s) unfit to be reissued, shall be fined not more than $100 or imprisoned not more than six months, or both.” The law is enforced by the Secret Service.
One big reason the government takes a dim view of destroying or defacing currency is that it has to replace it; it costs money to make money — about a nickel per note. And the demand for dollars is huge. The Bureau of Engraving and Printing produces 37 million notes a day with a face value of approximately $696 million.
Of course by the time the Obama admin is done with us it will take a wheel barrow of money to buy a gallon of gas so to keep warm burning money will become viable whether the Bureau of engraving and printing likes it or not.
Of course it was illegal to burn your draft card in the 60’s and that didn’t stop the Hippies from doing it. What is good for the goose is good for the gander.
It was illigal to dump tea into the Boston Harbor too!