Ohio Introduces Bill to Prevent State Taxes on Crypto Payments and Expand Crypto Rights

Ohio lawmakers have introduced new legislation aimed at fostering a more crypto-friendly environment in the state, including a provision that prohibits state taxes on digital assets used as a method of payment. The bill, known as Ohio House Bill 116, was introduced on February 24 by Representative Steve Demetriou, with co-sponsorship from other key legislators including Tex Fischer, Brian Lorenz, Ty D. Mathews, Riordan McClain, and Josh Williams.

Prohibition on State Taxes for Crypto Payments

The proposed bill seeks to amend existing state law, preventing municipalities from imposing additional taxes or fees on digital assets used for transactions. Specifically, it stipulates that "the general assembly shall not enact a bill that proposes to impose a fee, tax, assessment, or other charge on digital assets used as a method of payment for goods and services."

This measure includes cryptocurrencies, stablecoins, and non-fungible tokens (NFTs) under the definition of “digital assets,” and clarifies that while taxes typically applied to legal tender—such as state and sales taxes—would still apply to crypto transactions, no new levies will be imposed on digital asset payments.

Support for Crypto Self-Custody and Mining

In addition to addressing crypto payments, the bill also emphasizes the right of Ohio residents to self-custody their digital assets. This allows individuals to store their cryptocurrencies using hardware or self-hosted wallets and engage in activities such as crypto staking without interference.

The bill also outlines provisions to protect the rights of crypto miners in Ohio. It confirms that activities like mining, staking, and exchanging cryptocurrencies do not require “money transmission” licensing under state laws. Furthermore, Ohio residents will be allowed to mine crypto in residential areas as long as they adhere to local zoning regulations. Crypto mining businesses will also be explicitly permitted in industrial zones, ensuring they cannot be unfairly targeted by local zoning changes.

Ohio's State Pension Funds to Evaluate Crypto ETFs

One of the more forward-thinking aspects of the bill is its requirement for Ohio’s state retirement funds to assess the potential risks and benefits of investing in a crypto exchange-traded fund (ETF). The funds will be required to report their findings to the General Assembly within one year, potentially paving the way for greater institutional adoption of crypto assets in Ohio.

A Growing Trend of Crypto Legislation in Ohio

Ohio has been increasingly proactive in introducing crypto-related legislation. In September 2024, State Senator Niraj Antani introduced a bill to allow the state to accept cryptocurrency for payment of state taxes and fees. Later, in December, House Republican leader Derek Merrin proposed House Bill 703, which sought to establish a strategic Bitcoin reserve for the state.

Furthermore, in February 2025, Senator Sandra O’Brien introduced another bill aimed at creating an “Ohio Bitcoin Reserve Fund,” with a five-year holding period to accumulate and store Bitcoin for the state’s benefit.

Conclusion: Ohio’s Push for a Crypto-Friendly Environment

The introduction of House Bill 116 signals Ohio's commitment to becoming a hub for cryptocurrency and blockchain innovation. With provisions protecting digital asset payments, self-custody, and mining, as well as the exploration of crypto investment for state retirement funds, Ohio is positioning itself as a forward-thinking state in the evolving landscape of digital assets.

As the bill moves through the legislative process, it highlights Ohio's proactive approach to creating a favorable regulatory environment for crypto enthusiasts and businesses. If successful, these measures could significantly boost the state’s standing in the broader cryptocurrency ecosystem, attracting both innovation and investment.