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New Jersey Lawmakers Propose Tax Breaks for Bitcoin Exchanges

July 9, 2015

New Jersey State Assemblymen Raj Mukherji (D-Hudson) and Gordon Johnson (D-Bergen), are proposing a bill creating a regulatory framework for digital currency exchange companies and offering tax breaks to exchange companies created in or relocating to the

bitcoin

New Jersey State Assemblymen Raj Mukherji (D-Hudson) and Gordon Johnson (D-Bergen), are proposing a bill creating a regulatory framework for digital currency exchange companies and offering tax breaks to exchange companies created in or relocating to the state.

Andrea Castillo, the Technology Policy Program Manager at the Mercatus Center, says the bill will benefit New Jersey’s residents, and the state’s economy.

“New Jersey’s decision to develop a proactive and pro-innovation money transmission framework for virtual currency firms bodes well for Garden State citizens’ diversity of payment options and opportunities for growth”, she said. “Outlining a defined and reasonable registration process that ensures oversight while leaving room for the infant virtual currency industry to experiment and grow is a step in the right direction.

‘A Clear and Fair Framework’

“At the same time, lawmakers should resist the urge to introduce special tax or subsidy privileges for virtual currency firms,” Castillo said. “The goal should be to create a clear and fair framework that allows virtual currency firms to compete, grow, or even fail on their own merits—not to favor any one industry over any other.”

 

Mark Thornton, senior fellow with the Mises Institute, says the bill could encourage companies to move to New Jersey, bringing new residents and new services to the state.

“It is good to see the state of New Jersey interested in taking positive steps to opening up to the future, which is crypto-currencies like Bitcoin,” he said. “Tax breaks and other cost advantages could very well help New Jersey become the leader in the financial service industry.”

Jeffery Tucker, Director of Digital Development for the Foundation for Economic Education and Chief Liberty Officer and founder of Liberty.me, says the bill provides needed “certainty” for entreprenuers in the emerging digital currency industry. 

Tucker is also a policy advisor for The Heartland Institute, which publishes Budget & Tax News.

“In an ideal world, the government would do nothing for or against Bitcoin,” he said. “It is a technology that exists within a spontaneous space, needing neither support nor disabilities.

“However, in today's legal environment, in which everything is either approved or forbidden, this New Jersey legislation offers clarification, which is much welcome,” Tucker said. “It provides some measure of legal certainty that business can start and enjoy some protection from the statutes. That is a big step in the right direction.”

D. Brady Nelson (d.brady.nelson@me.com) writes from Washington, DC.

Author
Darren Brady Nelson is an Austrian school economist who serves as the chief economist at LibertyWorks and as an associate scholar with the Center for Freedom and Prosperity. Nelson is also a policy advisor to The Heartland Institute.
darren.nelson@me.com