Colorado has become the first state in the United States to accept cryptocurrencies for payment of taxes. The news was announced by Governor Jared Polis on Monday and has already been made available on the Department of Revenue website.
Residents of Colorado are now able to pay their taxes through the PayPal Cryptocurrency Hub with service fees of $1.00 plus an additional 1.83% of the payment amount. For now, payments are only accepted from personal accounts and PayPal supports Bitcoin, Ether, Litecoin, and Bitcoin Cash. Payments will be effective on the day they are initiated but may take three to five days for transfers to take place. Governor Polis, a member of the U.S. House of Representatives, has been a vocal proponent of cryptocurrencies, said earlier in the year that he expected the state to begin accepting payment for state taxes in cryptocurrencies. Polis spoke at the opening of the Denver Startup week, saying:
As a state, we’re on the forefront of digital innovation, whether it’s applying blockchain and shared-ledger technology as a new model for funding, or whether it’s simply being consumer-friendly and making sure that we allow for the kind of innovation that will disrupt legacy business practices and government practices to make them more efficient.
Other U.S. states have also tried to institute crypto tax payments. Ohio was the first to do so but suspended the service after a year due to legal complications. New Hampshire also attempted on multiple occasions to adopt crypto payments, but bills regulating such payments never made it beyond the state legislature. Other states like Georgia, Illinois, and Arizona have also considered instituting crypto tax payments.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.