The California State Board of Equalization (BOE) has issued a notice that discusses the sales and use tax applicability for transactions in which virtual currencies (e.g. Bitcoin) are accepted as payment for sales of goods and services in the same manner as transactions paid using traditional payment methods. The IRS has issued a notice stating that virtual currencies do not have legal tender status in any jurisdiction and should not be treated as United States currency or foreign currency, but instead, as property. The same holds for purposes of the California Sales and Use Tax Law. Tax applies to sales of tangible personal property in exchange for virtual currency in the same manner as with any other sale of tangible personal property for consideration. The measure of tax is the total amount of the sale or lease, whether received in money or other consideration. California tax law provides that the measure of tax from a barter or exchange transaction includes any amount allowed by a retailer to the customer for property or services of any kind. As a result, if a retailer enters into a contract in which the consideration is virtual currency, the measure of tax from the sale of the product is the amount allowed by the retailer in exchange for the virtual currency. Retailers who accept virtual currency as payment are instructed to retain documentation on the amount for which they regularly sell the same or similar property to their customers when payment is made in U.S. dollars. Retailers transacting business using virtual currency will need to insure their billing and receivables processes have the ability to value the virtual currency and to add the sales tax due to the transaction. If they accept the virtual currency as consideration of the sales tax amount due, they will need to have access to traditional US currency to remit the tax as the BOE does not accept virtual currencies as a payment method for any tax or fee program. (Special Notice L-382, California State Board of Equalization, June 2014)