New Hampshire Passes on Plan to Take Bitcoin for Tax Payments

February 4, 2016 By: Steven Anderson

Anyone else starting to get their tax stuff around?

April 15 comes sooner than you might expect, and that’s got plenty of minds turning toward tax season.

For New Hampshire, the issue came a little sooner than expected, and the state won’t be allowing its residents to turn to bitcoin to make tax payments.

Known as the Bitcoin Tax bill, the measure was rejected by a vote of 264 to 74, and would have allowed citizens to pay state taxes in Bitcoin.

The bill more specifically directed the New Hampshire treasurer to “develop an implementation plan for the state to accept bitcoin as payment for taxes and fees.” Introduced by Representative Eric Schleien, who had been actively working to keep New Hampshire residents informed about the ability to make purchases with the crypto-currency.

Some believe that one of the biggest impediments to such a plan is bitcoin’s history; its volatility and its poor public perception as being the currency of choice for ransomware vendors and those who traveled the Silk Road in its various online incarnations might have done such a program in.

The logistics involved might likewise have done it harm, though Schleien noted a company like BitPay might have been enough to keep the payments correctly processed.

Schleien vowed to continue trying, and given that his bill got support from almost a quarter of the legislature, that’s a good indication that it could well happen. Admittedly, there aren’t that many people that truck in bitcoin to begin with, so it’s not clear how rapidly support would emerge.

It’s also a safe bet that the legislature really wouldn’t want to be paid in a medium that could be worth less or more tomorrow than it is today, so to speak.

What happens when the value changes; if bitcoin loses half its value in the time between the bill’s payment and receipt of that payment, is the taxpayer assessed for the rest? What if it doubles? Are balances—positive and negative—either way accommodated instead, with the next tax bill higher or lower than normal to reflect the fluctuations in bitcoin?

It’s an interesting concept, but until bitcoin can hold a more regular value, its chances of being used in tax bill payments are still a bit remote. It could happen, though, and that possibility makes exploring the idea worthwhile.