Colorado, first U.S. State to accept Crypto Tax payments September 24, 2022
Colorado, first U.S. State to accept Crypto Tax payments <br><br><br>
Colorado, first U.S. State to accept Crypto Tax payments
In the US state of Colorado, residents can now pay their taxes using cryptocurrencies. Colorado Governor Jared Polis announced the move at an event that the state would accept cryptocurrency payments for all state tax bills.
The cryptocurrency payment option will be offered on all state tax bills, including individual and business incomes.
Polis said, “We’re just showing again, from a customer service perspective, how Colorado is tech-forward in meeting the ever-changing needs of businesses and residents,” Polis said.
Colorado is associating with PayPal’s cryptocurrency arm on the initiative. According to the state’s Department of Revenue, “The service fee for such transactions is $1.00, plus 1.83% of the total.”
Taxpayers opting to use direct debit are not subject to fees. Credit card payments impose a $0.75 fee, plus 2.25% of the net payment.
The Department of Revenue informed that the payments can be made in full using only one cryptocurrency. Also, transactions can only be completed through PayPal personal accounts, as opposed to PayPal business accounts.
Whereas, Polis further said, “Colorado is like the blockchain industry — constantly finding new ways to do things,” and the state will operate its own ledger of transactions converted to dollars, reports The Gazette.
In February, in an interview, Polis said, “We are touting Colorado as the center of the crypto economy, we have not only very favorable laws and rules, but we also have a great ecosystem of innovation here.”
At the time of the initial plan announcement, the CEO of Ledgible said, “Of course, using crypto to pay taxes does not change the tax treatment of the transaction for federal income or state income tax purposes. Colorado’s plan to accept cryptocurrency for state tax payments and other government fees is proof of crypto’s wide acceptance as both an investment and payment method.”
A list of specific acceptable cryptocurrencies to pay taxes isn’t mentioned on the Department of Revenue’s website, however, PayPal supports Bitcoin, Bitcoin cash, Ether and Litecoin.
“Our budget is still in dollars, our expenditures are still in dollars, and, of course, we don’t want to take the speculative risk of holding crypto, so we will be having a transactional layer there. It will be entering our systems as dollars. For consumer convenience, we want to accept payments in a wide variety of cryptocurrencies,” Polis said.
According to legal experts, those who are planning to pay taxes using crypto should expect additional fees down the line. They have to keep track of these transactions and determine tax obligations by themselves.
A poll conducted in a closed group on LinkedIn, ‘are you ready to pay taxes in crypto?’ gave a tiny idea of how many people are ready for crypto tax payments and how many are not, however, a little audience couldn’t decide it yet.