Colorado to Accept Crypto for State Taxes From This Summer
Colorado will accept crypto for tax payments and use an intermediary to convert it to dollars.
Key Takeaways
- Colorado will accept crypto for payment of state taxes by the summer, Jared Polis has confirmed.
- An intermediary will convert crypto payments to U.S. dollars.
- Wyoming and Arizona are also looking to pass crypto tax collection bills.
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Colorado Governor Jared Schutz Polis says the U.S. state will accept crypto for taxes from this summer.
Colorado Prepping Tax Collection in Bitcoin
Colorado residents will soon be able to pay their taxes with Bitcoin.
In a Tuesday interview with CNBC, Colorado Governor Jared Polis announced that the U.S. state would start accepting cryptocurrency for state taxes by this summer.
“We expect by this summer, pretty soon, to accept crypto for all of our state tax-related purposes,” Polis confirmed, adding that an intermediary would convert the payments into U.S. dollars.
Polis also said that Colorado was looking into letting state residents pay for additional services such as driver’s licenses with crypto.
The Colorado Governor has long been a crypto advocate. In 2014, he became the first politician in the U.S. to accept Bitcoin donations for his election campaign.
Colorado is not the first U.S. state considering a legislation to allow residents to file state taxes in cryptocurrency. In 2018, Ohio allowed companies to pay state-level corporate taxes via a special crypto-focused website. However, the program ended in 2019 after only 10 companies used it to file their taxes.
Wyoming and Arizona are also looking to pass similar crypto tax collection bills. A proposed bill in Arizona is seeking to amend state law to include Bitcoin as legal tender to pay “debts, public charges, taxes and dues.” Another bill yet to be presented in Wyoming legislature proposes accepting any cryptocurrency for “sales and use taxes” rather than income tax.
Colorado’s approach differs in that it will let taxpayers use crypto for all kinds of state taxes. Although Polis announced the move on CNBC, an official document regarding the update is yet to surface.
Notably, state proposals differ from federal rules on cryptocurrency taxes. The Internal Revenue Service labels cryptocurrency as property, meaning if a person decides to pay their state taxes with cryptocurrency, the conversion to dollars will be subject to capital gains taxes.
Disclosure: At the time of writing this piece, the author owned ETH and other cryptocurrencies.
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