The US state of Colorado will now accept cryptocurrency for tax payments, and residents of the city who want to use this facility can finally start doing so. Governor Jared Polis recently announced this development.
The provision to pay tax through digital slips is now available on the state Revenue Department website.
Although residents can now pay taxes using crypto, they will have to pay a fee of $1 per charge while paying 1.83% tax.
Tax payments will be accepted through PayPal’s Cryptocurrency Hub. Payments will be accepted from a person’s personal accounts with the help of a single type of crypto.
Only personal accounts can pay taxes with digital assets; companies have not yet received the green signal to pay taxes using digital tokens.
Payments will take effect the day they are initiated, but the transfer may take three to five days to complete. These payments are converted to the fiat currency at the same time.
PayPal to facilitate crypto tax payments
Jared Polis had previously floated the idea of the crypto tax payment option for some time this year. However, Colorado took some time to implement it.
Colorado’s history has been pretty well-disposed toward digital tokens, and that’s even helped it earn a spot on The Ascent’s list of the top five crypto states.
In 2019, Colorado passed the Colorado Digital Token Act. This law exempts certain digital tokens from securities regulations.
At the time, it was a move in favor of Colorado’s digital assets, and recent crypto tax payments have reinforced the same idea.
As Polis mentioned at Denver Startup Week,
We just showed again, from a customer service perspective, how Colorado is ahead in technology to meet the ever-changing needs of businesses and residents.
Colorado residents can pay these taxes using PayPal, as seen on the state’s payment portal.
PayPal has a cryptocurrency hub and these payments that go through the payment platform have been charged an additional fee.
Users will be able to deposit, withdraw and also have multiple digital tokens. Checkout must be in US dollars.
Other US cities have also expressed interest in cryptography
Colorado has been a champion of digital assets in the past as it drove technological advancements in the state.
Jared Polis is a member of the United States House of Representatives. He has been actively involved in crypto legislation and was also a founding member of the Congressional Blockchain Caucus.
Several other states also wanted to make tax payments on digital tokens. Ohio first did it in 2018, but then suspended it because it got involved in legal complications.
New Hampshire also wanted to apply for digital token tax payments, but the bills ultimately never made it out of the state legislature.
This has been the case in Illinois, Georgia and Arizona as well, as they also took into account crypto tax payments.
Other crypto-friendly laws included Miami and New York. The mayors of Miami and New York chose to take their first Bitcoin paychecks. This approach attracted digital token companies to these locations.
