Rhode Island bill allows state residents to spend $10,000 a month on Bitcoin tax-free

Introduced to the Rhode Island Senate last month, Bill S. 0451 allows state residents and businesses to supplement (or sell equivalent amounts) of up to 10 payments on Bitcoin less than $1,000 a month without being subject to the state capital gains tax.

The bill is an amendment to existing state income tax laws, with the exact language of the proposed law being:

“(b) Itcoin sales by individuals or businesses in Rhode Island are exempt from state taxes if the total sales per DIEM amount is less than $1,000 ($1,000). State tax-exempt restrictions (b) ITCOIN transactions must not exceed 10 sales per 10 (30) cycles per 30 days.”

The bill also defines the “sales” of “(b) itcoin” as “(b) a transaction in which itcoin is exchanged for another form of value, such as a Fiat currency or other physical or digital assets.”

The bill also makes it clear that this exemption applies only at the state level and does not affect federal tax obligations.

Under the bill, individuals and businesses engaged in these types of tax-free Bitcoin transactions are responsible for maintaining records of these transactions, including the total amount of revenue per day, and must be prepared to provide these records for Rhode Island’s audit or compliance purposes.

In a slide deck created by the Rhode Island Blockchain Council, shared with Bitcoin Magazine, Council president Crispelota writes that the passage of Bill S. 0451 will help reduce friction in digital asset payments.

He said, “The current tax impact of spending BTC has hindered the utility of Rhode Islanders and is suppressing economic activity.”

Pelota also noted that the passage of the bill stimulates the state’s blockchain-based economic activity and makes Rhode Island one of the states at the forefront of the technology.

Additionally, he also proposed that small businesses accept Bitcoin products and services as a means to stimulate economic growth.

So far, no other US states have introduced comparable legislation.

At the federal level, the only bill to propose something similar is Lumis-Gillibrand’s “Responsible Financial Innovation Act.” at least Tax exemptions for Bitcoin transactions were up to $200.

This post Rhode Island Building allows state residents to spend $10,000 a month on Bitcoin tax free, appearing first in Bitcoin magazine and written by Frank Colva.