Wyoming Exempts Virtual Currencies From Taxes
According to the IRS, virtual currencies are treated as property for U.S. federal tax purposes. This means that a taxpayer may have a taxable gain if the virtual currency exceeds a taxpayer’s adjusted basis.
Critics see this as a threat to the digital currency economy that aims to decentralize access to capital across the globe. While some countries and governments look to regulate virtual currencies, others are welcoming the new technology with open arms.
In an effort to lead the nation, Wyoming Senate File 111 exempts virtual currencies from property taxation in the state. The new bill defines virtual currencies as any type of digital representation of value that is used as a medium of exchange, unit of account or store of value, and is not recognized as legal tender by the United States government.
This bill along with four others recently passed by the Wyoming State Legislature is aimed at streamlining the legal framework of virtual currency and blockchain technology used in the state to encourage new business ventures and technology startups.
In addition to Senate File 111, House Bill 70 identifies tokens as utilities instead of securities, exempting them from securities laws. House Bill 17 also exempts virtual currencies from the Wyoming Money Transmitters Act.
In an interview with CNBC, State Representative Tyler Lindholm, explained how the state is opening a regulatory gate creating a “sand box” for developers to play. “If you mine bitcoin in my state, there is no property tax, no income tax and no corporate tax”, he added. Wyoming is one of only nine states in the U.S. that has no state income tax.
Mining bitcoin requires a huge amount of energy consumption which the state is ready to deliver. With coal, natural gas, and hydroelectric energy produced throughout the state, Wyoming only consumes 10% of current production.