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Author: Admin | 2025-04-28
Should refer to their state tax agency for current information about their region and, when in doubt, work with a crypto tax expert like our team at TokenTax.Personal state income taxes and cryptoStates without a personal income tax are generally favorable to individual crypto investors and can be considered crypto friendly states. As of 2023, eight states do not levy a state income tax on individuals. They are: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire does not tax earned income but imposes a 4% tax on dividends and interest.Notably, the majority of states apply the same tax rate to both investment income (capital gains) and income derived from work. However, there are nine states—Arizona, Arkansas, Hawaii, Montana, New Mexico, North Dakota, South Carolina, Vermont, and Wisconsin—that levy taxes on long-term capital gains at a rate lower than ordinary income.Corporate state income taxes and cryptoForty-four states and the District of Columbia impose a corporate income tax, with rates varying from 2.5% in North Carolina to 12% in Iowa. In contrast, four states—Nevada, Ohio, Texas, and Washington—opt for a "gross receipts tax" based on sales and receipts rather than a corporate income tax. Delaware, Pennsylvania, Virginia, and West Virginia levy both corporate income and gross receipts taxes.South Dakota and Wyoming stand as the sole states that do not impose either a corporate income tax or a gross receipts tax.Why is Puerto Rico so attractive for crypto taxes?Puerto Rico has become a popular destination for US taxpayers seeking to lower their taxes. Because Puerto Rico is an unincorporated US territory, Americans do not need a visa or passport to travel there, and it is relatively easy to establish residency and/or move a corporation.[4]Puerto Rico's crypto tax policies offer significant advantages to crypto traders, especially American citizens seeking ways
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