Colorado residents will now have the option of paying taxes in Bitcoin or other cryptocurrencies.
Colorado adds Bitcoin for paying taxes
Yesterday, it was announced that in the state of Colorado, US, taxes will be able to be paid in Bitcoin and other crypto.
BREAKING: Colorado becomes first US state to accept #bitcoin as payment for taxes 🇺🇸
— Bitcoin Magazine (@BitcoinMagazine) September 20, 2022
To do so, the only condition is that the payment will have to go exclusively through a PayPal account.
This represents a big step forward for the entire community and, especially, for Colorado, which is the first state in the US to advance such an initiative.
According to Axios Denver reports, the news was already anticipated on Monday by Colorado Governor Jared Polis during Denver Startup Week.
According to the statement, the taxes covered by this new service are:
- personal income tax;
- corporate income tax;
- sales and use tax;
- withholding tax;
- severance tax;
- excise tax on fuel.
The state government’s Department of Revenue has already added “cryptocurrencies” to the list of supported payment methods. Along with crypto, the ever-present credit and debit cards and cash will be present.
The same department is keen to specify that:
“Only PayPal Personal accounts can pay using cryptocurrency. The user needs to have the entire value of their invoice in a single cryptocurrency in their PayPal Cryptocurrencies Hub.”
Citizens who decide to take advantage of crypto to pay their taxes in the country will have a fee added to them of $1. To this will be added another fee of 1.83% of the entire amount.
However, Colorado has decided not to hold Bitcoin and other crypto. Instead, it opted for instant conversion to fiat currency. Certainly, to eliminate exposure to the high volatility of the crypto market.
The relationship between the United States and cryptocurrencies
The United States is putting a lot of effort into becoming one of the most crypto-friendly places in the world. In addition, decisions such as Colorado’s are helpful to the industry because they pave the way toward mass adoption.
More economic incentives would be required to push people to adopt cryptocurrencies in their daily lives.
Access needs to be easy and more convenient than other payment methods.
In the United States, Colorado is not the only country working on the development of the cryptocurrency market. In fact, it is worth mentioning the case of Texas, which, thanks to the provision of low-cost energy, is trying to attract as many companies as possible doing crypto mining.
The goal is to become the main hub and global benchmark for this industry.
US market and stock exchange regulators are certainly not making the job easy. Increasingly stringent regulation is being sought, requiring excessive control and monitoring. Factors that do not go too well with the decentralized nature and ideology of cryptocurrencies.
The Securities and Exchange Commission (SEC), for example, is fighting with gritted teeth in order to win the never-ending battle against Ripple. The outcome of that case will be crucial to the future of the market itself, because it will open or close the door to the biggest threat of many existing cryptocurrencies: falling under the definition of “security.”