Rhode Island lawmakers have launched a invoice that might briefly exempt small Bitcoin transactions from state revenue taxes, marking the second yr in a row that lawmakers have proposed the measure as a sort of pilot program to cut back tax friction in on a regular basis Bitcoin use.
Senate Invoice S2021, launched by Senator Peter A. Apolonio on January 9 and referred to the Senate Finance Committee, would create a restricted revenue tax exemption for Bitcoin transactions made by Rhode Island residents and Rhode Island-based companies.
Underneath the proposal, the sale or change of Bitcoin could be exempt from state revenue and capital features taxes on as much as $5,000 per thirty days, with an annual cap of $20,000.
This invoice would amend Rhode Island’s private revenue tax regulation by including a brand new part particular to Bitcoin.
The regulation defines Bitcoin as a “digital decentralized forex based mostly on blockchain expertise” and applies exemptions to each people residing within the state and companies based and working in Rhode Island.
If handed, eligible Bitcoin transactions that fall beneath the exemption threshold wouldn’t be included in taxable revenue for state functions.
Taxpayers could be allowed to self-certify their eligibility on their annual state tax return and would not be required to report particular person transactions so long as they preserve an inexpensive document of compliance with the annual restrict. These information have to be produced solely when requested by the state for audit functions.
The regulation additionally directs the Rhode Island Division of Company Regulation to subject plain steering outlining acceptable record-keeping practices and valuation strategies, utilizing the publicly accessible Bitcoin Worth Index to find out the market worth on the time of every transaction.
It is very important word that this proposal is clearly short-term. In accordance with the invoice, this exemption would turn into efficient on January 1, 2027, and could be repealed on January 1, 2028, except prolonged or modified by the Normal Meeting after contemplating the monetary and financial implications.
Lawmakers have characterised the invoice as a practical program aimed toward treating digital cash extra like conventional cash for small, on a regular basis transactions, quite than speculative investments.
Different states comparable to Rhode Island have additionally begun efforts to advertise Bitcoin.
Solely a handful of U.S. states have measures much like Rhode Island’s proposed Bitcoin tax exemption, and most states are removed from treating Bitcoin like on a regular basis cash.
Ohio is introducing a slender “de minimis” exemption that might exempt small cryptocurrency purchases from state capital features tax below a decrease threshold.
New Hampshire is one other state that actively helps Bitcoin. In Could 2025, New Hampshire grew to become the primary U.S. state to authorize the allocation of as much as 5% of sure public funds to cryptocurrencies below Home Invoice 302, permitting the Treasury Division to put money into Bitcoin and different giant digital belongings. Bitcoin is at the moment topic to market capitalization guidelines.
The put up Rhode Island Reintroduces Bitcoin Tax Exemption Invoice for Second Yr in a Row was initially revealed in Bitcoin Journal and was written by Micah Zimmerman.
