New Hampshire & Pennsylvania: Crypto-Payable Taxes, Cryptocurrency Not “Money”
Lawmakers in New Hampshire put forward a new bill on January 3, 2019, which would see cryptocurrencies legitimized as an acceptable payment method for “taxes and fees” in July 2020. Meanwhile, Pennsylvania excludes crypto from the definition of money but eases operations for cryptocurrency businesses.
House Bill 470 was introduced by Representatives Michael Yakubovich and Dennis Acton who are looking to follow in the footsteps of Ohio who in November 2018 became the first U.S. state to legalize tax payments with cryptocurrency. Furthermore, the bill would allow for third-party entities to also accept fees with crypto.
It is expected that the bill will be reviewed on January 29, 2019, and have a final decision deadline for March 14. Should the bill be passed, the state treasurer would have until November 1, 2019, to establish an integration plan for agencies.
With market volatility in mind, the bill goes on to describe that “issues of valuation and currency risk” are increased by such factors, adding:
“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’.”
Previously, New Hampshire lawmakers had attempted in 2015 to accept bitcoin as payment for taxes and fees with bill HB552. However, this may have been a little too early in the lifespan of the fringe technology and unfortunately “died in chamber.”
Progress in Pennsylvania?
As per the memo, the DoBS claims it has received numerous inquiries from those involved in “various forms of virtual currency exchanges.” Accordingly, they were seeking guidance from the DoBS who say they “will not be responding to these requests on a case-by-case basis.” Instead, they clarify that the Money Transmitter Act (MTA) does not apply to cryptocurrency exchanges and therefore, businesses engaging in the transfer of digital currencies do not need to obtain a Money Transmission Business Licensing Law.
Focusing on what constitutes as legal tender, the memo titled “Money Transmitter Act Guidance for Virtual Currency Businesses,” goes on to state that cryptocurrencies are not admissible under MTA definitions and that “to date, no jurisdiction in the United States has designated virtual currency as legal tender.”
Previously in 2016, House Bill 850 was introduced and passed, defining cryptocurrency as money for state MTA laws. This was later amended and cryptocurrency was removed from the definition of money, however.
The most important upside to this means that crypto-business operations will be easier and cheaper to set up in the state and this will drive the discussion to new heights in the United States.