New Hampshire Seeks to Accept Bitcoin for State Tax Purposes

New Hampshire seeks to become the American Bitcoin capital by introducing a bill requiring to accept bitcoin as payment for taxes and fees.

Photo: dataflurry/Flickr

Photo: dataflurry/Flickr

New Hampshire is known as one of the most progressive and libertarian municipalities in the USA.  Recently, its fame of being advanced and affluent has been proven once again by introducing a Draft Bill “requiring the state treasurer to develop an implementation plan for the state to accept bitcoin as payment for taxes and fees”.

On the 8th of January 2015, the Draft Bill was introduced to the State’s House of Representatives  and then referred to the House Ways and Means Committee (HWMC) which met on the 12th and 17th of  February to discuss it with bitcoin activists and politicians.

During these meetings, Republican Representative Eric Schleien spoke about the advantages and benefits either taxpayers or government could get from Bitcoin-based tax payments. He also stressed on the importance for New Hampshire to be the first and leading state to implement Bitcoin as payment for taxes.

“If New Hampshire can lead the way in the primary process, and we can lead in other ways, why don’t we lead the way to being the first state to actually implement a process,” Schleien told. He also added, “It’s going to happen, all 50 states are going to do this. Why don’t we be the first?”

If passed, the Bill would require the state treasurer to develop an implementation plan to address “any accounting, valuation, and management issues relative to the acceptance of bitcoin and identify an appropriate third party payment processor that will process bitcoin transactions at no cost to the state.”

In its current form, the Bill would require the state treasurer to submit this plan to the New Hampshire State Senate by 1 January 2017, so that Bitcoins can be accepted as payment of taxes and fees by 1 July 2017.

However, the introduction of the Bill represents an important step for Bitcoin and has the potential to provide quite a boost to the public perception of cryptocurrencies despite the fact that it is  in the very early stages of legislative approval.

Still, it’s obvious that the Bill will encounter lots of obstacles. Governments’ scepticism towards an unregulated Bitcoin market as well as the perception of legitimacy of Bitcoin in general are able to prevent it from being implemented.

Juan Llanos, an expert in anti-money laundering policy and cryptocurrencies, suggests that such a bill could only enjoy significant support at the state level, and particularly in New Hampshire: “If this were being presented at the federal level, the bill would be dead on arrival.”

Joel Valenzuela, a member of the New Hampshire Free State Project, says that “it’s still a long way until the government accepts bitcoins” as far as officials are not familiar with that cryptocurrency.

“A significant obstacle to the growth in bitcoin use is the perception of its legitimacy. If it were to be a form of payment accepted by the government, I could see bitcoin achieve huge success in a relatively short period of time,” Valenzuela said.

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