A bill introduced to the Rhode Island Senate would enable the state’s residents to spend or sell just under $1,000 in bitcoin 10 times per month without incurring state capital gains taxes.
Bill S. 0451, which was introduced to the Rhode Island Senate last month, permits the state’s residents and businesses to make up to 10 payments in bitcoin valued at less than $1,000 per month (or sell the equivalent amount) without being subject to state capital gains taxes.
The bill is an amendment to existing state income tax laws, and the exact language in the proposed legislation is as follows:
“Any sale of [b]itcoin by an individual or business in Rhode Island shall be exempt from state taxation if the total value of sales is less than one thousand dollars ($1,000) per diem. The limit of the state tax exempt [b]itcoin transaction shall not exceed ten (10) sales per a thirty (30) day cycle.”
And the bill defines a “sale of [b]itcoin” as “any transaction in which [b]itcoin is sold or exchanged for another form of value, such as fiat currency or other physical or digital assets.”
The bill also clarifies that this exemption only applies at the state level and that it doesn’t affect federal tax obligations.
Under the bill, individuals and businesses who engage with these types of tax-exempt bitcoin transactions are responsible for keeping records of these transactions, including the total value of sales per day, and should be prepared to provide these records to the Rhode Island’s department of revenue for audit or compliance purposes.
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