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> what's different about taxes in regards to bitcoin vs. government currency

The difference is that Bitcoin is now recognized as a currency, and as such is not subject to VAT when one wishes to, for example, exchange Euros for Bitcoin. Previously, EU residents would pay VAT on such an exchange because Bitcoin were more or less recognized as a good or service, and thus subject to VAT.

You don't "have to pay sales tax on it" when you buy BTC like you pay sales tax when you buy a banana. But you still have to pay sales tax when you purchase a banana with BTC.

Except Bananas are zero VAT rated, meaning no VAT is paid on them either. :)

Heh, should have checked before I made the assumption.

Buying it, because now it's treated as an exchange of currency. There is now nothing different between Bitcoin and Euros as far as taxes go, which is as it should be.