Ohio bares tax bill; South Dakota pulls plug on BTC reserve

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The election of Donald Trump in his second term as president of the United States has kicked off a period of frenetic legislative and executive activity around digital assets, both in Washington, D.C. and at the State level.

On Monday, Ohio introduced a bill that would prohibit the state legislature from imposing taxes on digital assets when used as a payment method, while lawmakers in South Dakota’s legislature deferred a vote that could have allowed the state to invest in BTC.

Ohio tax bill

Ohio House Bill 116 outlines protections for activities such as self-custody, mining, and staking while exempting certain digital asset transactions from money transmission licensing requirements.

Named the Ohio Blockchain Basics Act, it was introduced on February 24 by Representative Steve Demetriou and co-sponsored by Reps. Tex Fischer, Brian Lorenz, Ty D. Mathews, Riordan McClain, and Josh Williams.

One of the bill’s core aspects is that it would prevent state and local governments from imposing additional taxes, fees, or charges on digital assets used as a method of payment, treating them the same as traditional fiat transactions. However, they would still be subject to standard taxes, such as state and sales taxes, much like any payment made with fiat currency.

“The general assembly shall not enact a bill that proposes to impose a fee, tax, assessment, or other charge on digital assets used as a method of payment for goods and services,” stated the bill.

It also defined digital assets as any “virtual currencies, cryptocurrencies, native electronic assets, including stablecoins and non-fungible tokens, and other digital-only assets that confer economic, proprietary, or access rights or powers.”

Outside of taxes, the bill would ensure that no state agency could prohibit individuals from accepting digital assets as payment for goods and services while mandating that individuals have the freedom to self-custody their digital assets, for example, using self-hosted wallets.

In addition, it would allow residential digital asset mining as long as it complied with local ordinances.

The legislation also called for Ohio’s state retirement funds to assess the potential risks and benefits of investing in digital asset exchange-traded funds. The findings from such evaluations must be reported to the General Assembly within a year.

Ohio has been one of the most proactive states recently regarding digital asset-related bills.

South Dakota defers BTC investment

On February 24, a meeting of South Dakota’s House Commerce and Energy Committee voted to defer House Bill 1202, which proposed “[permitting] the state to invest” in BTC, to the 41st day of the state’s legislative session. However, the state legislature only has a maximum of 40 days in a session, so the motion effectively killed the bill’s current version.

Now dead in the water, the legislation would have amended the classification of the state’s public funds to include up to 10% in BTC investments.

“My bill to allow South Dakota to invest in Bitcoin died 9-3 in committee this morning,” said State Representative Logan Manhart via X on Monday.

Despite this setback, Manhart, who introduced the bill on January 30, promised that “we will be back next year,” suggesting that he plans to reintroduce the legislation in 2026.

BTC reserves high on the agenda

The concept of strategic Bitcoin reserves has been thrust to the center of political debate since the beginning of the Trump 2.0 era, in January.

According to legislation tracking site Bitcoin Laws, over 30 states are exploring legislation involving BTC reserves and digital asset investments. February alone saw lawmakers in Arizona and Illinois kick off legislative processes toward strategic BTC reserves, while Utah’s BTC reserve bill passed a second reading in the House, putting it on the verge of passage into law.

But such bills have not met with a universally warm reaction. Similar legislation establishing BTC reserves recently failed to pass in North Dakota, Montana, and Wyoming.

The differing fates of these bills demonstrate the tug-of-war between the new president’s decidedly pro-crypto agenda and the reality that BTC reserves are, at least according to some, antithetical to the foundational ideas underpinning digital assets.

This conflict will likely continue to play out on both the state and federal levels as more BTC reserve bills are tabled and voted on in the coming year.

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