What state tax rules and issues exist when a business accepts bitcoin from customers? What about for the customers? In March 2014, the IRS told us that convertible, virtual currency should be treated as property (rather than as currency under any special rule for currency, such as Code Section 988). That was in Notice 2014-21. States have mostly been silent on the topic. Where states conform to the federal system, that means, treat as property as well. But what about treatment for sales tax and some special state income tax issues, such as sourcing?
New York recently issued guidance on both income and sales tax.
I’m working on an article about state tax issues and virtual currency. What issues do you see for this topic? Is there state guidance you are seeking?
Did anyone give you bitcoin for Christmas or Hanukkah?
Original Post By: Annette Nellen