New Jersey Releases Guidance of Tax Treatment of Virtual Currency

Wednesday, April 8th, 2015

Virtual currency.
New Jersey

The New Jersey Department of Revenue (DOR) has issued guidance on the tax treatment of virtual currency (e.g., bitcoin).

The DOR treats the use of virtual currency to make purchases as a barter transaction. A barter transaction is a sale.

When a customer uses convertible virtual currency to pay for property, the sale is a barter transaction. As a result, if a seller uses virtual currency to buy products or services, sales tax is due based on the amount allowed in exchange for the virtual currency. This means that if the customer uses virtual currency to purchase taxable property, the customer owes tax on the market value of the virtual currency, converted to U.S. dollars.

Sellers that accept virtual currency should keep documentation showing how much they charge in U.S. dollars for items similar to those sold for virtual currency. Sellers must also keep a record of (1) the value of the virtual currency accepted at the time of each sale and (2) the sales tax collected for each sale. Both of these amounts should be converted to U.S. dollars.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

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