Bitcoin tax
by state
See what your state requires you to pay on your bitcoin profits.
This page is part of our comprehensive
US Bitcoin Tax Guide.
Important: federal taxes still apply
This guide covers state-level bitcoin capital gains taxes only.
You'll still owe federal taxes regardless of your state:
- Long-term gains: 0%, 15%, or 20% based on income
- Short-term gains: 10% to 37% as ordinary income
- High earners: 3.8% Net Investment Income Tax may apply
Our Bitcoin Tax Calculator (US) conveniently estimates both your federal and state tax obligations.
States with no capital gains tax
Bitcoin investors residing in these states hit the jackpot; zero state taxes on capital gains.
Alaska
0% Tax Rate
Florida
0% Tax Rate
Nevada
0% Tax Rate
New Hampshire
0% Tax Rate
South Dakota
0% Tax Rate
Tennessee
0% Tax Rate
Texas
0% Tax Rate
Wyoming
0% Tax Rate
Washington
0% Tax Rate
Special case: Washington
- $0 tax owed if your gains are under the deduction limit ($270k in 2024)
- 7% owed on capital gains from $270k-1M
- 9.9% owed on capital gains above $1M
States with reduced tax rates
These states offer deductions, exclusions, or lower rates on crypto capital gains.
Exclusion vs. Deduction?
It is a mistake to think these terms are used interchangeably.
There is an important tax distinction between the two.
Exclusion:
- Completely removed from your taxable income
- You don't pay tax on the excluded portion
- More valuable tax benefit
Deduction:
- Subtracted from your income to determine what gets taxed
- Saves you taxes at your marginal rate
- Less valuable than exclusion
States where bitcoin is taxed as regular income
Most US States tax bitcoin capital gains at the same rates as ordinary income.
These states keep it simple; no crypto favoritism means you pay full freight on bitcoin profits.
States with high taxes
If you're sitting on large bitcoin gains, these states will take the biggest bite.
California
Up to 13.3%
Hawaii
Up to 11%
Minnesota
10.85%
New Jersey
Up to 10.75%
New York
Up to 10.9%
Oregon
Up to 9.9%
Do state taxes really make a difference?
California vs Texas difference: $66,500
What's new in 2025 & how to save on bitcoin taxes
Major 2025 changes:
- Missouri: Eliminated capital gains tax entirely (retroactive to January 1, 2025)
- New Hampshire: Repealed interest/dividend tax in 2025 (now completely tax-free)
- New Mexico: Increased exclusion to $2,500 or 40% of gains (whichever is greater)
- Washington: Threshold adjusted to $270,000 for 2025 (up from previous years)
Tax planning strategies:
- Hold >1 year: Qualify for lower long-term capital gains rates
- Spread sales: Split large gains across multiple tax years
- Harvest losses: Learn tax loss harvesting strategies
- Establish legitimate residency in zero-tax states before major sales
- Document the move: Change voter registration, driver's license, bank accounts
- Beware lookback rules: Some states can tax you on gains from previous residency
Pro tip: a crypto tax service like Koinly can import your transaction history from all major exchanges.
The bottom line on bitcoin state taxes
Your bitcoin tax bill can vary dramatically based on where you live - from 0% in some states to over 13% in California. With federal taxes potentially reaching 20%, plus the 3.8% Net Investment Income Tax, your total tax bill could exceed 37% in high-tax states.
Find your state tax agency via the IRS.
Key takeaways:
- Zero-tax states like Texas and Florida can save you tens of thousands
- Crypto-friendly states offer meaningful deductions that cut effective rates
- High-tax states like California and New York can cost you dearly on large gains
Ready to dive deeper into bitcoin taxes?
Check out our complete Bitcoin Tax Guide for federal tax strategies, record-keeping tips, and advanced planning techniques. Visit our IRS reporting requirements page to ensure you file all the necessary tax forms on your next return.
This guide is for educational purposes only. Bitcoin Well is not responsible for any tax liabilities, penalties, or interest charges resulting from your use of this information. The IRS has not reviewed or endorsed this content. We make no warranties about the accuracy, completeness, or reliability of the tax information provided. Always consult with a qualified CPA, enrolled agent, or tax attorney before making tax decisions.
The information provided represents our understanding of current federal tax rules as they apply to bitcoin. We are not tax professionals and this content does not constitute tax, legal, or financial advice. Tax laws change frequently and vary by individual circumstances. State and local taxes may apply differently. Your specific situation may require different treatment than described here.