New Jersey May Double Tax Bitcoin Sales


In New Jersey, if you accept bitcoin as a retailer, you must collect sales tax twice. Thats the word from the New Jersey Division of Taxation, which has issued a technical advisory memorandum spelling out the tax implications of cryptocurrency in the Garden State.bitcoin

According to the state, bitcoin and other virtual currencies are treated as property, and a retail sale thats paid for with bitcoin is treated as a barter transaction which, the state says, actually consists of two separate sale transactions, because each party gives something of value to the other in order to receive something of value in return, according to the memorandum.

The memorandum continues: As a result, if a seller uses convertible virtual currency as consideration for goods or services, sales tax is due based on the amount allowed in exchange for the virtual currency. If the customer that provides convertible virtual currency in the trade receives property that is subject to tax, the customer owes tax based on the market value of the virtual currency at the time of the transaction, converted to U.S. dollars.

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