Bitcoin taxby 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.

Arizona: 4.5% top rate

(3.4% effective, 25% exclusion)

Arkansas: 5.5% top rate

(2.8% effective, 50% exclusion)

Hawaii: 11% top rate

(Lower preferential rate, exact rate varies)

Montana: 6.9% top rate

(Reduced rate, specific breaks available)

New Mexico: 5.9% top rate

(3.5% effective, 40% exclusion up to $1M)

North Dakota: 2.5% top rate

(1.5% effective, 40% exclusion)

South Carolina: 7% top rate

(4% effective, 44% exclusion)

Wisconsin: 7.65% top rate

(5.4% effective, 30% deduction)

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.

Alabama

Up to 5%

Colorado

4.40% flat rate

Connecticut

Up to 6.99%

Delaware

Up to 6.6%

Georgia

Up to 5.75%

Idaho

Up to 5.8%

Illinois

4.95% flat rate

Indiana

3.23% flat rate

Iowa

Up to 8.53%

Kansas

Up to 5.7%

Kentucky

Up to 5%

Louisiana

Up to 6%

Maine

Up to 7.15%

Maryland

Up to 5.75%

Michigan

4.25% flat rate

Mississippi

Up to 5%

Nebraska

Up to 6.84%

North Carolina

4.75% flat rate

Ohio

Up to 3.75%

Oklahoma

Up to 5%

Pennsylvania

3.07% flat rate

Rhode Island

Up to 5.99%

Utah

4.85% flat rate

Vermont

Up to 8.75%

Virginia

Up to 5.75%

West Virginia

Up to 6.5%

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?

For a California resident with a $500k BTC gain:

Federal tax: 20%$100,000
California tax: 13.3%$66,500
NIIT: 3.8%$19,000
Total:$185,500 (37.1% effective rate)

For a Texas resident with a $500k BTC gain:

Federal tax: 20%$100,000
State tax:$0
NIIT: 3.8%$19,000
Total:$119,000 (23.8% effective rate)

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:

Timing tactics:

  • 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

Residency 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

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.