Revenue departments of two US states Colorado and Utah introduced programs that will permit taxes to be paid in cryptocurrency
A program that will enable individuals and businesses to pay their tax bills with virtual
currencies, such as Bitcoin, Ethereum, and Dogecoin is being introduced by the revenue
departments of a pair of rocky mountain the US states Colorado and Utah targeting implementation within a few months.
Beginning Jan. 1, 2023, state and local governments will be able to accept crypto for tax payments under the Utah state legislature's H.B. 456. In addition, the law requires that the Division of Finance contract with a third party like a cryptocurrency payment gateway to expeditiously cryptocurrency into dollars conversion time before remitting them.
In Colorado, crypto advocate Governor Jared Polis urged the Department of Revenue to develop a program for accepting cryptocurrency tax remittances. It is still working through some of the details and the government is planning to have a special crypto payment portal up and running for taxpayers to use by September. To immediately exchange the cryptocurrency into U.S. dollars, Colorado is also planning to hire a third party. “We are working to make it similar to how we accept credit cards and other forms of payment,” said department spokesperson Meghan Tanis.
There are some logistical hurdles to overcome before the program launches in two Western states due to the sector's selloff.
During the 2022 legislative session, around 37 states considered the bills affecting certain aspects of cryptocurrency said Heather Morton, who is a policy analyst at the National Conference of State Legislatures. Several states have considered bills authorizing authorities to accept cryptocurrency, including Arizona, California, Hawaii, Illinois, Louisiana, New York, and Oklahoma. Even though many states were supporting following Colorado and Utah's lead, economists, academics and crypto skeptics are giving warning to lawmakers against initiatives that could harm state treasuries and taxpayers.
Currently before the California Legislature, Betty Yee, California's state controller, called a crypto-payment bill (S.B. 1275) as “fiscally irresponsible,” highlighting the price volatility for cryptocurrencies and lack of a robust federal regulatory framework for digital assets.
John Valentine, chairman of the Utah State Tax Commission said that in Utah's program, state money would not be at risk during cryptocurrency conversions. He further added that it may be difficult to find a vendor who is willing to absorb the risk.
CBW - External Analyst