Bitcoin in the Bluegrass State
- Jul 2, 2014 | Gail Cole
The Kentucky Department of Revenue follows the Internal Revenue Service’s guidelines with respect to bitcoin and other virtual currency. In short, bitcoin is property, not currency.
That said, Kentucky Department of Revenue reminds:
“Any business that accepts Bitcoins as a form of payment must convert the Bitcoin into U.S. dollars, and charge 6 percent Kentucky sales and use tax on any taxable transaction for which Bitcoin represents the financial instrument of consideration.”
Since the value of bitcoin is fluid, businesses must maintain accurate documentation “to verify the value of Bitcoin at the time of the transaction.”
More and more state departments of revenue are taking a stance on virtual currency. For example, in California, you can’t pay sales tax with bitcoin.
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