Ohio's Crypto Tax Shield: Protecting Digital Payments

Ohio lawmakers have introduced a bill aimed at protecting cryptocurrency payments from additional taxes. House Bill 116, introduced on February 24 by Representative Steve Demetriou, seeks to ensure that digital assets, including cryptocurrencies and stablecoins, are treated fairly under the state's tax system.

The bill, dubbed the "Ohio Blockchain Basics Act," prevents the imposition of extra fees, assessments, or taxes on digital assets when used for payments. While standard sales taxes will still apply, the law would block any new levies targeting crypto transactions. Additionally, the legislation ensures that state agencies and political subdivisions cannot prohibit businesses and individuals from accepting cryptocurrency as payment for goods and services, potentially paving the way for broader adoption of digital assets across Ohio.

Beyond taxation, the bill also enshrines the right for Ohio residents to self-custody their digital assets. It allows individuals to store their crypto using hardware wallets or self-hosted solutions, providing full control over their holdings. Furthermore, the bill clarifies that crypto-related activities such as staking and mining will not be subject to "money transmission" licensing requirements. It also explicitly protects crypto mining operations, ensuring they can function in industrial zones without facing undue restrictions. Residential mining will also be permitted as long as it complies with local zoning laws.

Another notable aspect of the bill is its mandate for Ohio's state retirement funds to assess the risks and benefits of investing in cryptocurrency exchange-traded funds (ETFs). Lawmakers would then receive a report within a year, potentially opening the door for state-backed crypto investments. The state has been increasingly proactive in crypto legislation, with multiple bills introduced in recent months, including a proposal requiring Ohio to accept Bitcoin for tax payments and another aimed at establishing a strategic Bitcoin reserve fund with a long-term holding period.

If passed, House Bill 116 could make Ohio one of the most crypto-friendly states in the U.S., setting a precedent for other states looking to integrate digital assets into their financial frameworks without imposing additional regulatory burdens.