Today, Bloomberg Businessweek reported that Wyoming wants to become the most crypto-friendly state in the nation. The governor has enacted new laws to encourage cryptocurrency businesses, including exempting them from paying state taxes. The IRS declared in 2014 that cryptocurrencies are classified as “property” and therefore will be taxed as such. Wyoming, on the other hand, has decided to classify them as an “Asset” and so they are exempt from state taxes.
These new state tax-related laws specifically target LLCs rather than corporations. The benefit to Wyoming is that no matter which direction the cryptocurrency industry goes – up or down or sideways – the state will still win by earning millions of dollars in business filing fees.
Delaware is the most famous state in the union for encouraging LLCs to register in their state via very friendly LLC laws and they earn far more in fees then Wyoming does. Wyoming has not let that fact go unnoticed and so, having been the first state in the union to enact LLC laws in the 70’s, the state is now trying to encourage more LLC registrations. Specifically cryptocurrency related.
In addition to what it gains in filing fees, the state also hopes that businesses will relocate to the state and bring more jobs, as well as spending, to boost the local economy.
LLCs which want to raise capital by issuing ICOs will also benefit from fewer state regulations, but they will still have to comply with federal SEC regulations. This could be just enough relief to keep those new startups from moving overseas.
These changes have already caused dozens of currency and blockchain related companies to relocate to Wyoming and/or to inquire about the process.
Read the full Bloomberg Businessweek article here
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