Find Out the Most Crypto Tax Friendly States in the US

CoinLedger recently published data on US states and their crypto tax policies, and the study named Florida as the most crypto-tax-friendly state in the US. 

Florida’s no-state income tax makes it pretty good for crypto users. In addition, the state has several crypto-friendly policies, including a pilot program that allows firms to pay state fees in cryptocurrency.

Discover the Best US States for Crypto Taxation

CoinLedger achieved its ranking by calculating state income tax rates, state cryptocurrency regulations, and political sentiments about cryptocurrencies. Other crypto-tax-friendly US states include Texas and Wyoming. Both states have a 0% state income tax, pro-crypto laws, and permission for banks to act as cryptocurrency custodians.

The report ranks Nevada as the fourth-most crypto-tax-friendly state. Like the others on this list, Nevada boasts no state income tax and has a history of enforcing crypto-friendly policies. Recall that in 2017, Nevada historically blocked local governments from taxing the use of blockchain.

Interestingly, the reports place the busy state of New York as the worst for crypto tax. New York has an income tax rate of 10.9%. In addition, the BitLicense regulatory framework doesn’t add to the state’s appeal for crypto users.

The Other Side of the Fence

Furthermore, the report ranks the state of California as the second worst. Cryptocurrency is subject to California’s sliding income tax system, which includes rates ranging from 1% to 13.3% if earned as income within the state. Reports suggest that California would implement regulations modeled on BitLicense’s system in New York.

Joining California and New York in terms of income tax rates, Hawaii, Massachusetts, and New Jersey had rates of 11%, 5%–9%, and 1.4%–10.75%, respectively. These states also have strict policies for crypto activities. For example, all exchanges operating in Hawaii must get a Money Transmitter License, which means that fiat reserves must back the value.

Commenting on the importance of knowing these tax systems, David Kemmerer, CEO of CoinLedger, said, “Some crypto investors will lose thousands of dollars of profits due to their state’s tax rates.” Knowing states with better tax climates could be a good way to profit more from crypto earnings. 

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.


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