Colorado becomes the last US state to allow residents to pay taxes in Bitcoin – crypto.news

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The first US state to accept bitcoin, officially for tax payments, is now Colorado. According to a report by Axios DenverGov. Jared Polis declared the adoption of the new tax-paying mechanism Monday during Denver Startup Week.

What taxes will be payable in BTC?

The different types of taxes that residents can pay in Colorado through BTC include personal income tax, corporate income tax, sales and use tax, compensation allowance tax, departure, withholding tax and fuel excise tax.

Taxpayers who wish to use BTC for state tax remittance must use a PayPal account. Colorado Department of Revenue Says “Only Personal PayPal Accounts Can Pay Using Cryptocurrencies,” adding that the user must have the total amount of their invoice in a single cryptocurrency in their PayPal cryptocurrency hub.

Taxpayers, while using crypto, will pay 1.83% of their payment amount in fees plus an additional $1.

Crypto regulations are getting friendlier in the US

US states have raced for the award for most cryptocurrency-friendly jurisdiction as they compete to lure employees and businesses into the new remote economy.

However, it’s hard to justify paying taxes in bitcoins, especially given Colorado’s predetermined partnership with PayPal. While the user would likely lose future financial gains from bitcoin’s price this way, Colorado would not receive this buying power because the state has no intention of storing cryptocurrencies or BTC on its balance sheet.

Polis has been a strong supporter of cryptocurrencies. He said earlier in February this year that they can be more user-friendly and provide a “symbolic” signal that they are viable payment methods in the state, much like credit cards.

Thaddeus Batt, the state’s first lead blockchain architect, was nominated by Polis to serve on the Blockchain Council. In addition to clarifying the policy and regulatory requirementsproviding financial services and support, taxing digital assets and other matters, part of his responsibility includes advancing blockchain technology within Colorado government departments.

Will all states embrace crypto?

Colorado is not the only state to use cryptocurrency for official transactions. According to the NCSL, in 2021, cryptocurrency-related legislation was pending in 33 states and Puerto Rico, and 17 states passed cryptocurrency bills or resolutions.

Cryptocurrency is digital or virtual money that is not issued or guaranteed by the United States government, any other government, or any central bank, according to the National Conference of State Legislatures (NCSL). This means that cryptocurrency can be completely anonymous and is not limited by factors such as transaction fees or geography.

Bitcoin payments cannot yet be made through business accounts. The service has a usage fee of $1.00 plus 1.83% of the payment amount. There could also be other expenses, including PayPal purchase costs or small fuel costs.

Additionally, Argentina’s inflation-hit capital, Buenos Aires, announced in April that it would accept cryptocurrency payments for taxes. Other US states, such as Florida and Ohio, have explored the use of cryptocurrency for tax payment.

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