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Bitcoin is like cash for the Internet, according to Both brick-and-mortar and online businesses accept Bitcoin as payment. And though it does not have a legal-tender status, tax liability can accrue as a result of income, sales, payroll, capital gains, or the like resulting from Bitcoin’s use.



The fact that tax liability can accrue prompted a provider of Automated Teller Machines (ATM Provider) to submit a query to the Missouri Department of Revenue (Department) to clarify whether its Bitcoin-related commerce is taxable.

In its application for the letter ruling (ruling), the ATM Provider established that it is not a Bitcoin exchange, nor does it produce Bitcoins. The ATM Provider further explained that Bitcoins are a form of digital currency that is created by software and stored electronically, and it merely holds them in an electronic wallet for purchase. A customer inserts paper currency in the ATM and the Bitcoins are transferred to the customer's electronic wallet. The ATM does not render any tangible product. The ATM Provider is neither a Bitcoin exchange nor a Bitcoin producer.

In the ruling, the Department determined that the ATM Provider, through which its customers may purchase Bitcoins, is not required to collect and remit sales or use tax upon the transfer of Bitcoins through its ATMs. Its rationale was that Bitcoin is intangible property, and as such, its transfer is not subject to sales and use taxes.