Florida Leads as Best State for Crypto Taxation, New York Ranked Worst: CoinLedger Report
Summary:
In a study using data from CoinLedger, Florida has been named the best US state for cryptocurrency taxes due to its 0% state income tax and crypto-friendly policies. Texas, Wyoming, Nevada, and Arizona follow closely, offering advantages like no state income tax on crypto and encouraging crypto regulations. Conversely, New York has been marked as the worst state for cryptocurrency tax due to its high income tax rate and strict BitLicense regulatory framework, followed by California, Hawaii, Massachusetts and New Jersey.
Florida has earned the distinction of being the most favorable US state for cryptocurrency taxation, while New York finds itself at the bottom of the list, as per data from CoinLedger. Flaunting a non-existence state income tax along with pro-crypto regulations, including an experimental scheme enabling corporate entities to remit state fees in crypto, landed Florida at the top of the crypto tax-friendly states. The findings are based on a crunching of state income tax levels, the state's stance on cryptocurrency regulations, and the views of state leaders on digital currencies. Texas and Wyoming, both offering 0% state income tax and supportive cryptocurrency legislations, trailed closely behind Florida. Furthermore, financial institutions in these states are allowed to act as guardians of crypto assets. Nevada, at fourth place, was the first one to bar local municipalities from imposing taxes on blockchain use way back in 2017, and it doesn't impose state income tax on crypto. Arizona, ranking fifth, levies a flat 2.5% tax on cryptocurrency income and was among the pioneering states to pronounce airdrops tax-exempt at the state level. Coinledger's CEO, David Kemmerer, underscored the vital need for investors to familiarize themselves with regional tax laws, arguing that steep state tax rates could whittle down thousands from their profits derived from crypto investments. On the opposite end of the spectrum, New York emerged as the least friendly state for crypto taxation with a maximum income tax of 10.9%. Additionally, the state enforces a strict BitLicense regulatory framework. California occupies second place from the last, as it imposes taxes on crypto earned as income, depending on their progressive income tax brackets that vary between 1% and 13.3%. Possessing comparable regulatory policy to New York's BitLicense is also under consideration. Hawaii, Massachusetts and New Jersey followed these states with a state income tax of 11%, 5-9% and 1.4% to 10.75% respectively. Furthermore, Hawaii makes it obligatory for all of its crypto-exchanges to secure a Money Transmitter Licence, which means maintaining equivalent fiat reserves. Lastly, the International Revenue Service (IRS), responsible for taxation in the US, on January 17, remarked that until a revised framework is published, businesses can omit documenting cryptocurrency transactions exceeding $10,000.
Published At
1/24/2024 5:24:11 PM
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