Breaking: Colorado becomes the first state to accept Bitcoin as payment for taxes
(Kitco News) - The U.S. state of Colorado has just become the first state to accept crypto for tax payments. Colorado Governor Jared Polis announced the new development at the Denver Startup Week on Monday.
According to the Colorado Department of Revenue’s (CDR) website, “cryptocurrency” is now listed as a form of payment, with crypto transactions facilitated through the “PayPal Cryptocurrencies Hub.”
Based on the rules outlined by the CDR, cryptocurrency payments will only be available on PayPal personal accounts, and users are required to have the full value of an invoice held in a single cryptocurrency in their PayPal crypto hub account.
Business accounts are not permitted to make cryptocurrency payments at this time. The fee to use the service is $1.00 plus 1.83% of the payment amount. Additional fees, such as PayPal purchase fees or miner/gas fees may also apply.
This development from Polis is not surprising as the governor, who was elected in 2019, is a long-time crypto advocate and one of the co-founders of the Congressional Blockchain Caucus in 2016.
As an interesting side note, Governor Polis accepts campaign contributions in the form of crypto and is currently fundraising for his reelection campaign by selling nonfungible tokens (NFTS) for $52.80 each. As of Monday, 175 of the NFTs have been sold since June.
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Earlier in 2022, Polis expressed his intentions to push for crypto tax payments in the state, which has now become a reality.
“As a state, we're on the forefront of digital innovation, whether it's applying blockchain and shared-ledger technology as a new model for funding, or whether it's simply being consumer-friendly and making sure that we allow for the kind of innovation that will disrupt legacy business practices and government practices to make them more efficient," Polis said during an event this week, according to the Denver Business Journal.
Following this new integration, Colorado citizens can use cryptocurrency to pay individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax.