The authorities of Colorado announced that state residents can now pay their taxes in cryptocurrencies instead of fiat. Among the supported digital assets are the two biggest by market capitalization – Bitcoin (BTC) and Ether (ETH).
Still, Colorado’s Revenue Department is not allowed to accept direct crypto payments, which is why it partnered with PayPal, which will help with the transactions.
Colorado’s Pioneering Move
The State’s officials disclosed that Colorado residents are now able to use cryptocurrencies as a means of payment for business income tax, individual income tax, sales and use tax, severance tax, withholding tax, and excise fuel tax. Apart from Bitcoin and Ether, individuals can employ Bitcoin Cash and Litecoin, too.
“Cryptocurrency has been modified as an additional payment option for taxpayers who are ready to complete their online transactions to pay for their state taxes on Revenue Online,” spokesperson Daniel Carr stated.
The Revenue Department can not accept direct digital asset settlements, so it joined forces with the multinational fintech company PayPal. It will act as a broker for each transaction and convert cryptocurrencies into US dollars, meaning consumers will have to pay certain fees for that service.
The move turned Colorado into the first American state where individuals could use digital assets for tax payments. Utah is the only other state where such steps are in motion, and it is expected to become live at the beginning of 2023.
Back in 2018, Ohio also announced similar intentions. However, after Attorney General Dave Yost argued that it would not benefit the local financial system, the authorities withdrew their plans.
Crypto Initiatives in Other US States
Colorado is not the only state where the cryptocurrency sector thrives. In Florida, for example, Miami’s Mayor Francis Suarez tried to attract bitcoin miners by providing them with cheap nuclear electricity.
The political leader, a keen proponent of the primary digital asset, has also argued that Miami should turn into a crypto hub, while BTC must be “integrated into every aspect of society.”
New York City’s Mayor – Eric Adams – is also fond of the digital asset industry. He vowed to receive his first three paychecks in bitcoin, while later, he opined that blockchain technology and its merits should become a subject in schools.
Last but not least, at the beginning of 2022, state Senator Wendy Rogers of Arizona introduced a bill that could turn bitcoin into a legal tender in the region. If approved, the Grand Canyon state will become the first where BTC is an official payment method.
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