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Crypto tax by state
Every American owes federal tax on crypto gains. Whether you also owe state tax depends on where you live. Here is the short version, with sources. This is general information, not tax advice.
The federal baseline
The IRS treats digital assets as property, not currency. Selling or otherwise disposing of crypto you held for investment produces a capital gain or loss; crypto you receive for goods or services in a business is ordinary income. Federal returns ask a yes/no digital-assets question. (IRS: Digital assets)
States with no individual income tax (2026)
| State | State income tax on crypto gains | Crypto apps available |
|---|---|---|
| Alaska | None | 18 of 20 |
| Florida | None | 19 of 20 |
| Nevada | None | 17 of 20 |
| New Hampshire | None (interest & dividends tax repealed as of 2025) | 19 of 20 |
| South Dakota | None | 19 of 20 |
| Tennessee | None | 19 of 20 |
| Texas | None | 18 of 20 |
| Wyoming | None | 18 of 20 |
| Washington | No wage income tax; 7% capital gains excise tax on long-term capital assets above the annual deduction (higher rate over $1M) | 18 of 20 |
Sources: Tax Foundation, 2026 State Income Tax Rates (from state statutes and forms) · Washington DOR capital gains tax · checked October 17, 2026.
Flat-rate income tax states
Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Mississippi, North Carolina, Ohio, Pennsylvania and Utah tax income at a single rate as of January 1, 2026. Most other states and DC use graduated brackets. Missouri exempts capital gains income from its income tax (Tax Foundation); confirm with the Missouri Department of Revenue how that applies to digital assets.
Keep good records
Every trade, swap and spend can be a taxable event, so keep your exchange exports. Crypto tax software can turn them into the IRS forms you need.
Crypto taxes
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Common questions
Which states have no state income tax on crypto gains?
Eight states levy no individual income tax at all as of 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming (New Hampshire repealed its interest and dividends tax as of 2025). Washington has no wage income tax but taxes certain long-term capital gains. Federal tax still applies everywhere.
How does the IRS treat crypto?
For US tax purposes, digital assets are property, not currency. If you hold crypto for personal or investment use, a sale or other disposal is taxed as a capital gain or loss; crypto received for goods or services in a business context is ordinary income.
Does Washington state tax crypto gains?
Washington levies a 7% capital gains excise tax on the sale or exchange of long-term capital assets such as stocks, bonds and other investments, above an annual deduction (RCW 82.87), with a higher rate on gains over $1 million. Ask the Washington Department of Revenue how it applies to your specific digital-asset gains.
Which states have a flat income tax?
As of January 1, 2026, 15 states tax wage income at a single rate: Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Mississippi, North Carolina, Ohio, Pennsylvania and Utah. In these and other income-tax states, crypto gains are generally included in state taxable income, so check your state's rules.
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