What the merchant does with the bitcoin doesn't effect wether the transaction is taxable to you. Check with you accountant, but I'm thinking you'll have to acc

What the merchant does with the bitcoin doesn't effect wether the transaction is taxable to you. Check with you accountant, but I'm thinking you'll have to account for and pay a tax on any gains in your bitcoin's value at the time you spend it. Assuming I'm correct, it is a taxable event anyway.