Business 24 January 2019

Erik Gibbs

New Hampshire could allow crypto tax payments

Ohio may soon not be the only state in the U.S. to allow taxes to be paid in cryptocurrencies. Two lawmakers in New Hampshire have introduced legislation that could lead the state’s residents to pay their taxes in crypto as well. The bill would allow all state-level agencies to receive crypto, including New Hampshire’s taxman.

As published by legiscan.com, House Bill 470 (HB 470) was introduced on January 3. It was sponsored by State Representatives Michael Yakubovich and Dennis Action and looks to require all state agencies to accept crypto using a third-party intermediary. If the bill is approved, New Hampshire’s treasurer would need to implement a plan for all state agencies to begin accepting crypto by November 1 of this year, with July 1 2020 as the deadline to begin accepting crypto.

Current regulations in the state, as with most states, only allow U.S. dollars to be used to make payments at all state agencies. HB 470 hopes to change this and would allow the agencies to receive crypto through “an appropriate third party payment processor that will process cryptocurrency transactions at no cost to the state.”

The bill further states, “Assuming legislation is approved to amend this statute, the issues of valuation and currency risk are heightened by the volatility of cryptocurrency (bitcoin) fluctuations in value against the U.S. dollar.

“Tax payments received by the state would need to be converted to U.S. dollars or alternatively, mitigate such risk by continually monitoring cryptocurrency levels held by the state to ensure there is as much demand for state payments to vendors and payees as the state has in its ‘inventory’.”

In 2015, the state had sought the opportunity to introduce crypto regulation that would allow Bitcoin to be used as payment for state-related transactions. However, that bill died in House committee.

HB 470 doesn’t stipulate who the third-party intermediary would be, or if agencies could select their own. When Ohio agreed to allow taxes to be paid in crypto, it partnered with BitPay in order to convert all payments to U.S. fiat. Overstock.com reportedly became the first company to take advantage of the new law earlier this month. 

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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