New Hampshire’s proposal to accept Bitcoin for tax payments fails

The prospect of paying tax with cryptocurrencies in the US state has fallen through due to the market's unpredictable volatility

New Hampshire’s innovative state legislation that would have allowed state agencies to accept cryptocurrencies as payment for taxes has been retracted.

The state House of Representatives announced the retraction on January 8 following a motion from the General Court’s Executives Departments Committee, which deemed the initiative as “inexpedient to legislate”.

The main stumbling block for state agencies in New Hampshire was the volatility of Bitcoin and other cryptocurrencies, which could have turned into a significant expense for the state.

“These changes would increase Department of Revenue Administration (DRA) expenditures by an indeterminable amount in FY 2020, in anticipation of an implementation date of July 1 2020,” the report states.

“The DRA cannot estimate if any additional revenue would be generated due to the acceptance of cryptocurrencies. The volatility of accepting cryptocurrencies could affect revenues due to tax assessments being generated in US currency.”

Ohio also experienced issues when trying to implement cryptocurrency tax payments into its existing system, with the initiative lasting less than a year.

In November 2018, it became the first state to accept cryptocurrency for tax payments, only for the legislation to be suspended in October 2019 as the state’s treasurer, Robert Sprague, claimed that officials needed to ensure it was compliant with existing Ohio law.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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