Paying taxes in crypto, Colorado says yes. It seems that other states are thinking about it, this could be just the beginning.
Paying taxes in crypto, yes, it is now possible in Colorado. And, this is an interesting fact, because it seems that other states are thinking about it.
Colorado Governor Jared Polis announced in February that the state government would allow residents to pay their taxes in cryptocurrencies as early as summer 2022. For some experts, this decision legitimizes crypto-assets and should allow their adoption to continue its growth.
Polis also added that the state could also accept cryptocurrency payments for things « as simple as a driver’s license or hunting license. »
The governor further stated that he was « not at all » concerned about the potential volatility of cryptocurrencies like Bitcoin. Indeed, the state does not plan to hold cryptos for very long.
It can be said that in the context of crypto news, being able to pay taxes in crypto currencies is rarely a news that goes unnoticed and it is quite normal.Such payments can offer many benefits to both taxpayers and states.
Will paying taxes in crypto be common in a while?
Back in February, California State Senator Sydney Kamlager introduced a bill regarding cryptos. That legislation sought to amend the state code to accept cryptocurrencies for certain civic payments.
The bill proposed to authorize a state agency to « accept cryptocurrency as a method of payment for the provision of government services. » In 2018, Ohio was the first U.S. state to accept Bitcoin for taxes. However, it dropped the program in 2019, citing legal issues.
As we can see, it is not always simple at the legal level to accept payment in cryptos, however, more and more states and countries are thinking about it and are making progress so that they can accept them soon.
In conclusion, it can be said that even if governments do not keep crypto-assets on their balance sheets, the demand for the crypto-currencies they accept could increase.
However, one of the ways to keep the demand for fiat currencies is their use in paying taxes. For governments, people need to hold fiat currencies in order to meet their tax obligations at the end of the year. This was the position of the Central Bank of Russia before the conflict in Ukraine.
We can also recall that El Salvador and some cantons in Switzerland allow the payment of taxes in cryptos.
