A New Hampshire legislative subcommittee has recommended that the state's House of Representatives kill a bill that, if enacted, would allow citizens to pay their taxes with bitcoin.

The bill, filed by state representative Eric Schleien earlier this year, calls for the state treasury to select a third-party service through which it could accept bitcoin, with New Hampshire receiving US dollars in return.

A subcommittee formed to debate the issue recommended that the bill be voted "ineligible to legislate", a move that, if confirmed by the House, would shelve the bill. However, the measure could be taken up during the new legislative session next year.

Rep. Bill Ohm, who sits on the state's Ways and Means Committee, told CoinDesk in an email that the subcommittee voted against the measure in part because of what he called "liquidation risk".

"The treasurer, Bill Dwyer, testified that he needs to pay the state's bills in currency (federal funds, etc), and bitcoin is a commodity that needs to be liquidated for the state to use to pay it's bills," he said.

Ohm added that he shared Dwyer's position on the risk of the state's handling of bitcoin, explaining:

Ohm stressed that no final determination has been made. The Ways and Means Committee will meet on 14th October to vote on its final recommendation, which will then move to the full House for a final vote on the measure.

Andrew Hemingway, a supporter of the bill who ran for state governor last year, expressed his disappointment about the subcommittee's recommendation.

"It is killed. I am a supporter of the bill. I am disappointed by the committee's actions and find them short sighted in the face of a new emerging economy... It's a dreadful decision," he said.

The news comes after California's AB-1326 bill, which sought to regulate digital currency businesses, was shelved by a state senator.

Stan Higgins co-wrote this report.

New Hampshire State House image via Shutterstock