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Michigan Virtual Currency Payments Are Taxable

  • Nov 6, 2015 | Gail Cole

 Paying with bitcoin does not make taxable transactions exempt from Michigan sales tax.

Virtual currency such as bitcoin is not considered tangible personal property in Michigan and therefore sales of virtual currency are exempt. However, when virtual currency is used to pay for taxable goods or services, those transactions remain subject to sales tax.

Since the value of virtual currency fluctuates constantly, taxpayers who accept virtual currency as payment are required to maintain documentation demonstrating the value of the virtual currency at the exact time of the sales transaction.

Taxpayers may not pay sales and use tax in virtual currency.

Additional information is available in the Michigan Department of Treasury November 2015 Tax Policy Newsletter.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.