Ohio House Passes Bill Exempting Crypto Transactions Below $200 From Tax

Ohio’s House of Representatives has taken a significant step towards embracing cryptocurrency by passing House Bill 116, also known as the Ohio Blockchain Basics Act. This legislation aims to incentivize the use of cryptocurrencies, including mining and staking activities, by exempting crypto transactions below a $200 threshold from capital gains tax. The bill, which passed with a vote of 70-26, is now awaiting approval from the Senate and the signature of Ohio Governor Mike DeWine.

The primary sponsor of the bill, Republican Representative Steve Demetriou, has been a strong advocate for the legislation. He argues that the bill will make it easier for consumers to use cryptocurrencies and protect the crypto mining industry from excessive government interference. Demetriou believes that the new laws will enable the growth of blockchain innovations in Ohio and position the state as a leader in embracing the new digital economy.

One of the key provisions of House Bill 116 is the $200 tax-free threshold for crypto transactions. This exemption is designed to encourage the use of Bitcoin and other cryptocurrencies as a form of money for everyday purchases. By lowering the tax burden on consumers, the legislation aims to make cryptocurrencies a more viable option for daily transactions, potentially increasing their adoption and use.

The bill also includes provisions to support crypto mining operations. It allows miners to operate in residential areas as long as they adhere to noise restrictions and respect their neighbors. Industrial areas will also be permitted to host mining operations, and the bill includes protections against land rezoning that could affect crypto mining businesses. Miners will be subject to the same laws as similar companies in the state and will have the ability to dispute any grievances they face. This approach aims to treat crypto mining as a regular business, avoiding the creation of unnecessary regulations for the industry.

House Bill 116 is part of a broader effort to attract crypto entrepreneurs to Ohio. The state aims to entice these individuals with incentives to bring their assets and capital, enriching the local economy with resources that other states may have rejected. If successful, this incentive-based approach to regulation and taxation could serve as a model for other states looking to embrace cryptocurrencies.

The passage of House Bill 116 comes at a time when both state and federal governments are debating rules that apply to the crypto industry. Ohio has also proposed a Strategic Bitcoin Reserve bill, which would allow the state to invest public funds into Bitcoin. Other states, such as New Hampshire and Arizona, have already passed similar legislation. At the federal level, efforts are ongoing to pass President Trump’s Strategic Bitcoin Reserve into law, which would allow the US government to redirect seized Bitcoin from criminal proceedings to create a fund for future use.

If House Bill 116 is signed into law, it could provide a significant boost to blockchain companies, allowing them to focus on their businesses without the burden of excessive legislation. Consumers would also benefit from more options to spend and save their cryptocurrencies without the worry of draconian tax requirements. The alignment of state and federal legislation could create a more favorable environment for the growth and adoption of cryptocurrencies across the country.