State-by-State Guide to Cryptocurrency Taxation: Understanding the Implications of Virtual Currency Purchases and Sales

2023-11-13 08:00:00

Alabama

No Guidance

Alabama does not provide any authority concerning the taxability of virtual currency.

Alaska

No Tax

Alaska does not impose a state sales and use tax.

Arizona

No Guidance

Arizona does not address the sales and use tax treatment of virtual currency such as bitcoin.

Arkansas

Nontaxable

In Arkansas, cryptocurrencies such as Bitcoin are not subject to tax.

California

Cash Equivalent

California treats virtual currencies, such as bitcoin, as cash equivalents, and taxes purchases with virtual currencies the same as purchases made with cash.

Colorado

No Guidance

Colorado does not address whether the sale of virtual currency and bitcoin are subject to sales tax.

Connecticut

No Guidance

Connecticut does not address the sales and use tax treatment of virtual currency.

Delaware

No Tax

Delaware does not impose a sales and use tax.

District of Columbia

No Guidance

The District of Columbia has not addressed the sales tax implications of purchases of virtual currency, such as Bitcoin.

Florida

No Guidance

Florida does not address the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

Georgia

No Guidance

Georgia does not address whether the sale of virtual currency and bitcoin is subject to sales tax.

Hawaii

No Guidance

Hawaii does not address the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

Idaho

No Guidance

Idaho does not address the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

Illinois

No Guidance

The Illinois Department of Revenue has not issued any guidance on the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

Indiana

No Guidance

Indiana has not addressed the taxability of transfers of virtual currency such as Bitcoin.

[Gain a global perspective of the classification and taxation of crypto.]

Iowa

No Guidance

Iowa does not address the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

Kansas

Cash Equivalent

Kansas treats virtual currency as a cash equivalent and requires sellers accepting virtual currency as payment in a taxable transaction to convert the virtual currency into U.S. dollars and charge Kansas sales and use tax.

Kentucky

Cash Equivalent

Kentucky treats bitcoin as a cash equivalent and requires sellers accepting bitcoins as payment in a taxable transaction to convert the bitcoin into U.S. dollars and charge Kentucky sales and use tax.

Louisiana

No Guidance

Louisiana does not specifically address the imposition of sales and use tax on purchases of virtual currency such as Bitcoin.

Maine

No Guidance

Maine does not address the sales and use tax treatment of virtual currency such as bitcoin.

Maryland

No Guidance

Maryland has not addressed the taxability of virtual currency such as Bitcoin.

Massachusetts

No Guidance

Massachusetts does not specify whether or not purchases of virtual currency or bitcoin are taxable.

Michigan

Cash Equivalent

Guidance from the Michigan Department of Treasury states that Michigan does not impose sales and use tax on purchases of convertible virtual currency because the virtual currency is not tangible personal property. The guidance refers to virtual currency as a digital representation of value that has an equivalent value in real currency . . . and acts as a substitute for real currency.

Minnesota

Cash Equivalent

Bitcoin is treated as an intangible the same as cash.

Mississippi

No Guidance

Mississippi does not address the taxation of sales of virtual currency.

Missouri

Nontaxable

Missouri treats bitcoin as nontaxable intangible property.

Montana

No Tax

Montana does not impose a sales and use tax.

Nebraska

No Guidance

Nebraska does not address the sales and use tax treatment of virtual currency such as bitcoin

Nevada

No Guidance

Nevada does not address the sales and use tax treatment of transactions involving Bitcoin or other virtual currency.

New Hampshire

No Tax

New Hampshire does not impose a sales and use tax.

[See the White House’s proposed excise tax for digital asset mining.]

New Jersey

Cash Equivalent

New Jersey treats virtual currencies, such as bitcoin, as cash equivalents, and taxes purchases with virtual currencies the same as purchases made with cash.

New Mexico

No Guidance

New Mexico has not addressed the status of virtual currency such as Bitcoin with respect to gross receipts tax.

New York

Cash Equivalent

New York treats virtual currencies, such as bitcoin, as cash equivalents, and taxes purchases with virtual currencies the same as purchases made with cash.

North Carolina

No Guidance

North Carolina does not address the tax treatment of Bitcoin or other virtual currency.

North Dakota

No Guidance

North Dakota has not addressed the exchange or use of virtual currency such as Bitcoin.

Ohio

No Guidance

Ohio does not specify the tax treatment of virtual currency or bitcoin.

Oklahoma

No Guidance

Oklahoma has not directly addressed the taxability of virtual currency (e.g., Bitcoin).

Oregon

No Tax

Pennsylvania

No Guidance

Pennsylvania does not address the sales and use tax treatment of virtual currency or bitcoin.

Rhode Island

No Guidance

Rhode Island has not addressed the taxability of virtual currency such as Bitcoin.

South Carolina

No Guidance

South Carolina does not address the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

South Dakota

No Guidance

South Dakota has not addressed the taxability of virtual currency (e.g., Bitcoin).

Tennessee

No Guidance

Tennessee does not specify the sales and use tax treatment of virtual currency or bitcoin.

Texas

No Guidance

Texas does not address whether the sale of virtual currency and Bitcoin are subject to sales tax.

[Explore the considerations of trading and investing in Bitcoin.]

Utah

No Guidance

Utah does not address the sales and use tax treatment of transactions involving bitcoin or other virtual currency.

Vermont

No Guidance

Vermont does not address the sales and use tax treatment of virtual currency such as bitcoin.

Virginia

No Guidance

Virginia does not specifically address purchases using virtual currency.

Washington

Nontaxable

Washington does not tax the purchase of cryptocurrency, such as Bitcoin, and treats purchases of taxable goods or services made with cryptocurrency as taxable transactions the same as if made with cash or other consideration.

West Virginia

No Guidance

West Virginia does not specifically address the sales and use taxes implications of virtual currency, such as Bitcoin, although West Virginia generally imposes sales and use taxes on sales of tangible personal property and services.

Wisconsin

Cash Equivalent

The sales price of virtual currency itself is not taxable because virtual currency represents an intangible right rather than tangible personal property or a taxable service.

Wyoming

No Guidance

Wyoming does not address the sales and use tax treatment of transactions involving Bitcoin or other virtual currency.

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