ARTICLE
Cryptocurrency Tax by State
Last Updated November 13, 2023
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The majority of states have not yet issued guidance on the tax treatment of virtual currency or cryptocurrency. A major consideration from a state tax perspective is whether or not the purchase of virtual currency or cryptocurrency is a taxable sale for sales and use tax purposes.
Taxpayers should also seek guidance on how to calculate the sales tax due on purchases made with virtual currency or cryptocurrency, and how to report such sales to state taxing authorities. In states that have not addressed the tax issues arising from the use of virtual currency or cryptocurrency, taxpayers may want to examine the state’s approach to taxing the sale and use of other types of currency or other intangible property, as well as researching whether the state conforms to the federal tax treatment of convertible virtual currency.
So what’s your responsibility at the state level when it comes to sales and use taxes on cryptocurrency? This handy guide will give you a complete state-by-state breakdown of cryptocurrency sales and use tax laws and regulations.
Cryptocurrency Tax Regulations by State
Note: Data on this page is updated as of November 13, 2023. Bloomberg Tax Research subscribers can access the latest information here. Not a subscriber? Request a demo.
Cryptocurrency Tax Laws and Regulations by State
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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