"Senate Bill S2021, introduced on January 9 by Senator Peter A. Appollonio and referred to the Senate Finance Committee, would create a limited income tax exemption for Bitcoin transactions conducted by Rhode Island residents and Rhode Island-based businesses. Under the proposal, Bitcoin sales or exchanges would be exempt from state income and capital gains taxes up to $5,000 per month, with a $20,000 annual cap."
"Taxpayers would be allowed to self-certify eligibility on their annual state tax returns and would not be required to report individual transactions, provided they maintain reasonable records demonstrating compliance with the annual limit. Those records would only need to be produced if requested by the state for audit purposes. The legislation also directs Rhode Island's Department of Business Regulation to issue plain-language guidance outlining acceptable recordkeeping practices and valuation methods, using publicly available Bitcoin price indices to determine market value at the time of each transaction."
Senate Bill S2021 would add a new personal income tax section defining Bitcoin as a digital, decentralized currency based on blockchain technology and create a limited exemption for qualifying Bitcoin transactions. The exemption would apply to state residents and Rhode Island-based businesses, excluding Bitcoin sales or exchanges from state income and capital gains taxes up to $5,000 per month with a $20,000 annual cap. Taxpayers could self-certify eligibility on annual returns and need only produce reasonable records upon audit. The Department of Business Regulation would issue plain-language guidance on recordkeeping and valuation using public Bitcoin price indices. The exemption would take effect January 1, 2027, and sunset January 1, 2028, unless extended or amended.
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