Lawmakers in Rhode Island have reintroduced a bill to create a temporary state income tax exemption for small Bitcoin transactions, while a national coalition of cryptocurrency businesses is pressuring Congress to extend similar tax relief to Bitcoin and other digital assets beyond just stablecoins.
Rhode Island's Senate Bill S2021, introduced by Senator Peter A. Appollonio on January 9, 2026, seeks to exempt qualifying Bitcoin sales or exchanges from state income and capital gains taxes. The proposal defines Bitcoin as a "digital, decentralized currency based on blockchain technology" and applies to both residents and businesses within the state.
The exemption would apply to transactions under $5,000 per month, with a maximum annual cap of $20,000. If passed, the measure would take effect on January 1, 2027, and is set to expire on January 1, 2028, unless extended by lawmakers after a review of its fiscal and economic impact. Taxpayers would be required to self-certify their eligibility annually on state tax returns, with recordkeeping necessary only in the event of an audit.
Concurrently, a coalition led by the Bitcoin Policy Institute—including Bitcoin Voter, Crypto Council, and MoonPay—is urging key congressional committees to broaden federal tax provisions. They argue that the current focus of the GENIUS Act on payment stablecoins creates unnecessary complexity for the millions of Americans using Bitcoin for everyday purchases, where each transaction is currently a taxable event requiring capital gains calculation.
The coalition's proposal calls for tax relief to be extended to "network tokens" like Bitcoin, provided they have a market value of at least $25 billion. They suggest capping individual qualifying transactions at $600 with the same $20,000 annual spending limit. The groups warn that without this broader relief, new broker reporting rules set for 2025 could lead to increased audit risks and reporting discrepancies, potentially discouraging crypto adoption among the over 45 million Americans who hold digital assets.
