Colorado will become the first US state where you can pay taxes with bitcoin. In doing so, Governor Jared Polis is fulfilling a promise he made early this year.
Bitcoin taxes
This is according to reports by Axios Denver. The governor announced the implementation of the new payment method on Monday during Denver Startup Week.
Down reportedly, citizens can use cryptocurrencies to pay their own income tax. But it also includes income tax for companies just like sales and so-called withholding tax. As if it were not enough, one can also pay excise duties on fuel and severance taxes with bitcoin.
The state government’s Department of Revenue now lists “cryptocurrency” as a method of payment. This gives bitcoin a place among the well-known debit and credit cards and cash, among others.
However, bitcoin payments must be sent from a PayPal account. So these are KYC’ed bitcoin, purchased on a regulated platform.
Colorado residents can now pay state taxes with #bitcoin and cryptocurrency –– but only with a PayPal account.https://t.co/nHs0gNbxpT
— Bitcoin Magazine (@BitcoinMagazine) September 20, 2022
The Colorado Department of Revenue writes:
“Only PayPal Personal accounts can pay with cryptocurrencies. Users must have the full value of their bill in one cryptocurrency in their PayPal Cryptocurrencies Hub.
Citizens who pay their taxes with bitcoin pay $1 in fees, plus an additional 1.83% in fees.
US states
Colorado’s plan had been on hold for some time. Earlier, the governor shared that they will immediately convert crypto currencies coming in to US dollars. This conversion is important to meet accounting standards.
However, there are already more states where bitcoin taxes have been flirted with. These include Arizona, where a bill was drafted early this year to make bitcoin a legal tender. Florida is also working on a way to accept bitcoin for taxes, on the hand of Governor Ron DeSantis.
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Gabriele Spapperi is a veteran cryptocurrency investor and blockchain technology specialist. He became fascinated with Bitcoin and distributed ledgers while studying computer science at MIT in 2011.
Since 2013, Gabriele has actively traded major cryptocurrencies and identified early-stage projects to invest in. He contributes articles to leading fintech publications sharing his insights on blockchain technology, crypto markets, and trading strategies.
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