Colorado: first US state to accept Bitcoin for taxes
Colorado residents will now have the opportunity to pay taxes in Bitcoin or other cryptocurrencies.
Colorado Adds Bitcoin to Pay Taxes
Yesterday it became known that in the state of Colorado, USA, taxes will be able to be paid in Bitcoin and other crypto.
BREAKING: Colorado becomes first US state to accept #bitcoin as payment for tax 🇺🇸
— Bitcoin Magazine (@BitcoinMagazine) 20 September 2022
To do so, the only condition is that the payment must go exclusively through one PayPal accounting.
This represents a major step forward for the entire community and especially for Colorado, which is the first state in the United States to promote such an initiative.
In accordance Axios Denver reports, the news was already expected Monday by the Colorado governor Jared Polis during Denver Startup Week.
According to the statement, the taxes covered by this new service are:
- personal income tax;
- corporation tax;
- sales and use tax;
- withholding tax;
- severance tax;
- special tax on fuel.
The state government’s revenue department has already added “cryptocurrencies” to list of supported payment methods. Along with crypto, the ever-present credit and debit cards and cash will be present.
The same department is concerned with specifying that:
“Only PayPal personal accounts can pay with cryptocurrency. The user must have the entire value of the invoice in a single cryptocurrency in their PayPal Cryptocurrencies Hub.”
Citizens who decide to take advantage of crypto to pay taxes in the country will have one fee added to them of $1. An additional fee is added to this 1.83% of the entire amount.
However, Colorado has decided not to hold Bitcoin and other crypto. Instead, it opted for immediate conversion to fiat currency. Ideally, to eliminate exposure to high volatility the crypto market.
The relationship between the United States and cryptocurrencies
The US is putting a lot of effort into becoming one of the most crypto-friendly places in the world. Additionally, decisions like Colorado are helpful to the industry because they pave the way mass adoption.
More financial incentives would be required to push people to adopt cryptocurrencies in everyday life.
Access must be simple 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 case of Texaswhich thanks to supply of low-cost energytrying to attract as many companies as possible crypto mining.
The aim is to become the main hub and the global benchmark for this industry.
American market and exchange regulators certainly do not make the job easy. Increasingly stricter regulations are sought, which require excessive control and monitoring. Factors that do not sit well with the decentralized nature and ideology of cryptocurrencies.
The Securities and Exchange Commission (SEC), for example, is fighting tooth and nail to win endless battle against Ripple. The outcome of that case will be decisive for 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 “Safety.”
