AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX (Establishes a simplified exemption from state income tax for small-scale Bitcoin transactions up to $5,000 per month, or $20,000 per taxable year.)

S2021

2026 -- S 2021
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LC003436
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO TAXATION -- PERSONAL INCOME TAX

Introduced By:
Senator Peter A. Appollonio

Date Introduced:
January 09, 2026

Referred To:
Senate Finance
It is enacted by the General Assembly as follows:
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SECTION 1. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is hereby
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amended by adding thereto the following section:
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44-30-12.1. Bitcoin exemption.

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(a) For the purposes of this section the following terms shall have the following meanings:
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(1) "Bitcoin" means a digital, decentralized currency based on blockchain technology,
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which is used for peer-to-peer transactions.
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(2) "Business" means and refers to any entity, corporation, partnership, sole proprietorship,
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or other organization that is based and operates primarily in the State of Rhode Island.
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(3) "Individual" means and refers to a natural person who resides in the State of Rhode
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Island.
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(4) "Market value" means and refers to the current price of Bitcoin in fiat currency as
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determined by a reputable, publicly available source or index at the time of the transaction.
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(5) "Sale of Bitcoin" means and refers to any transaction in which Bitcoin is sold or
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exchanged for another form of value, such as fiat currency or other digital or physical assets.
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(b) Any sale or exchange of Bitcoin by an individual or business based in Rhode Island
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shall be exempt from state taxation if the total value of such transactions does not exceed five
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thousand dollars ($5,000) per month, or twenty thousand dollars ($20,000), per taxable year.
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(c) Transactions exempt under this section shall not be included in the individual's or
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business's income for the purpose of calculating state income or capital gains tax.

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(d) Taxpayers may self-certify their eligibility for this exemption on their annual state
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income tax return.
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(e) Individuals and businesses claiming this exemption shall not be required to report such
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transactions individually but shall maintain reasonable records sufficient to verify that the total
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value of Bitcoin sales or exchanges within the taxable year does not exceed the annual exemption
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limit. Such records shall be made available to the department of revenue upon request for audit
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purposes.
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(f) The department of business regulation shall issue plain-language guidance for
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individuals and businesses regarding this exemption, including examples of acceptable
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recordkeeping and valuation methods.
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(g) This section shall remain in effect until January 1, 2028, unless extended or amended
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by the general assembly following review of its fiscal and economic impact.
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(h) If any provision of this section or its application to any person or circumstance is held
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invalid, the invalidity shall not affect other provisions or applications of the section which can be
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given effect without the invalid provision or application, and to this end, the provisions of this
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section are severable.
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SECTION 2. This act shall take effect on January 1, 2027, and sunset on January 1, 2028.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- PERSONAL INCOME TAX
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This act would establish a simplified exemption from state income tax for small-scale
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Bitcoin transactions up to five thousand dollars ($5,000) per month, or twenty thousand dollars
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($20,000) per taxable year.
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This act would take effect on January 1, 2027, and sunset on January 1, 2028.
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LC003436
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LC003436 - Page 3 of 3