Ohio House Bill 116 exempts crypto transactions below $200 from state capital gains taxes, with annual inflation-based adjustments.
The bill legalizes crypto mining in residential and industrial zones, barring targeted restrictions and unfair rezoning.
Blockchain activities like staking, node operation, and swaps will not require a money transmitter license in Ohio.
Ohio’s House of Representatives passed a bill this week that exempts certain crypto transactions from capital gains taxes and shields digital asset operations from restrictive regulation. The bill, House Bill 116, moves next to the Senate for further review.
Capital Gains Relief and Inflation Adjustment
According to a post on X by Bitcoin Magazine, the legislation proposes exempting crypto transactions under $200 from state capital gains taxes. This threshold is designed to increase annually with inflation. The adjustment will follow the Consumer Price Index and round up to the nearest $5. The bill bars state tax authorities from reducing this limit once adjusted.
https://twitter.com/BitcoinMagazine/status/1935431496216478081
The exemption aims to simplify the use of crypto for small payments by eliminating tax-related tracking on low-value transactions. The tax relief would apply during the first tax year after the bill becomes law, if approved by the Senate and signed by Governor Mike DeWine.
Protections for Crypto Mining and Node Operations
House Bill 116 provides broad protections for crypto mining in Ohio. Individuals can mine in residential zones if they meet local regulations. Industrial-zoned areas will be open to crypto mining operations that comply with existing noise and zoning rules.
The bill restricts the state from enacting mining-specific regulations that do not also apply to similar businesses. It also prohibits land rezoning aimed at targeting crypto mining sites without a formal process. Affected parties can challenge such rezoning actions in court.
The proposed law clarifies that a money transmitter license is not required for certain blockchain-related activities. These include mining, staking, running blockchain nodes, swapping one cryptocurrency for another, and developing crypto software. The bill states these actions do not involve fiat currency and should not fall under money transmission laws. This section removes potential licensing barriers for developers and network participants in the state.
Exclusion From Securities Laws and Wallet Protections
Businesses that offer staking or mining services are not to be treated as offering securities under the bill. This section responds to recent federal enforcement actions targeting similar services across the country.
Additionally, the legislation prohibits state agencies from restricting Ohioans from using hardware or self-custody wallets. It protects users’ ability to hold and control their digital assets without third-party interference. Ohio lawmakers are also reviewing a separate proposal introduced earlier this year.
The bill seeks to establish a Bitcoin reserve fund for the state. That proposal remains under consideration in the Financial Institutions, Insurance, and Technology Committee. With House Bill 116 moving to the Senate, Ohio continues to expand its legal framework around blockchain and digital assets.
