The New Jersey Division of Taxation has issued a technical advisory memorandum (TAM) explaining New Jersey’s tax position that transactions involving convertible virtual currency— “electronic/digital money” with an equivalent or substitute value in real currency, such as bitcoins—are subject to state tax liability, including sales and use tax, corporation business tax and gross income tax. For purposes of the sales and use tax, the Division of Taxation will treat convertible virtual currency transactions as barter transactions, where both transacting parties give something of value to the other in order to receive something in value in return. As such, sales or use taxes will be due from both parties to the transaction. For purposes of the corporation business tax and the gross income tax, New Jersey is following the Internal Revenue Service’s lead towards treating convertible virtual currency like property, such that taxpayers will realize gains or losses on sales or exchanges of convertible virtual currency. The full New Jersey TAM can be found here.