Michigan Issues Guidance on Virtual Currency

Nov 2nd, 2015

The Michigan Department of Treasury released guidance explaining what virtual currency is and how sales tax applies when virtual currency is used.

Virtual currency, such as Bitcoin, has a monetary equivalent to real currency. If a person purchases taxable property using virtual currency, the person has to figure out the dollar value of the virtual currency. This value must be calculated as of the day and exact time the sale occurred, and the seller must keep records of this value. Sales tax applies based on the dollar value of these sales.

However, virtual currency is not itself considered tangible personal property, so purchases of virtual currency are not subject to sales tax.

http://michigan.gov/documents/treasury/Tax-Policy-November2015-Newsletter_504036_7.pdf?20151027111821