Vermont Legislator Proposes a Bill That Would Allow Tax Collection in Crypto

A Vermont state legislator has proposed a bill that will create regulations for the Blockchain technology.

Senator Alison Clarkson introduced the bill on January 3, 2018. Public records show that the bill has since been forwarded to the Committee on Economic Development, Housing and General Affairs.

Aside from requiring additional reports on cryptocurrencies and Blockchain, it specifically outlines how the state could categorize several firms as “digital currency limited liability companies,” especially those that operate their own network.

In the event that the bill is approved, those companies would be mandated to pay “in the form of its digital currency a transaction tax equivalent to $0.01” every time a new unit of cryptocurrency is created, transferred or traded.

The bill reads:

“A digital currency limited liability company is exempt from taxes otherwise applicable.”

It also stated in its opening:

“This bill proposes to implement strategies relating to blockchain, cryptocurrency, and financial technology in order to: promote regulatory efficiency; enable business organizational and governance structures that may expand opportunities in financial technology; and promote education and adoption of financial technology in the public and private sectors.”

It also outlines protections on how firms should administer the protocols for a specific cryptocurrency. Those companies “may adopt any reasonable algorithmic means for accomplishing the consensus process,” and in accordance with the provision, “provide for the modification of the consensus process or the substitution of a new process that complies with the requirements of the law.”

The submission of the bill is no longer a surprise, given that state lawmakers have shown their interest on the issue. The legislative body approved a Blockchain research in June, which will seek to assess how Vermont’s job market may be affected. Lawmakers, in 2016, finalized a law making Blockchain information admissible as court evidence.

Clarkson’s bill also calls for a “Fintech Summit” which will gather state and industry stakeholders in order to discuss how Vermont can promote the technology’s wider purpose. The state has set aside $25,000 to help finance the event, with the help of the Agency of Commerce and Community Development.