The American state of Colorado will now accept cryptocurrency for tax payments, and residents of the city who wish to use this facility can finally start to do so. Governor Jared Polis recently announced this development.
The provision to pay for taxes through digital tokens has now been made available on the state Department of Revenue website.
Although residents are now able to pay taxes through crypto, they will be required to pay a fee of $1 for charges while having to pay 1.83% of the tax.
The tax payments shall be accepted through PayPal’s Cryptocurrency Hub. Payments will be accepted from an individual’s personal accounts with the help of only one type of crypto.
Only personal accounts can pay taxes with digital assets; businesses are yet to receive the green signal to pay taxes via digital tokens.
The payments will be effective on the day they are initiated, but it can take up to three to five days for the transfer to be completed. These payments are then changed to fiat currency at once.
PayPal To Facilitate Crypto Tax Payments
Jared Polis had earlier proposed the crypto tax payment option idea for some time this year. However, Colorado took some time to implement it.
Colorado’s history has been quite well disposed towards digital tokens, and that has even helped it earn a spot on The Ascent’s list of top five crypto states.
In the year 2019, Colorado passed the Colorado Digital Token Act. This act exempts certain digital tokens from securities regulations.
This back then was a pro-digital asset move by Colorado, and the latest crypto tax payments have reinforced the same idea.
As Polis mentioned at the Denver Startup Week,
We’re just showing again, from a customer service perspective, how Colorado is tech-forward in meeting the ever-changing needs of businesses and residents.
The residents of Colorado 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.
The users will be able to deposit, withdraw and also hold several digital tokens. The settlement at the checkout service has to be in U.S. dollars.
The other U.S. Cities Have Also Expressed Interest In Crypto
Colorado has been a proponent of digital assets in the past as it pushed for technological advancements within the state.
Jared Polis is a member of the U.S. 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 carry out tax payments in digital tokens. Ohio did it first in 2018 but later suspended it as it got involved in legal complications.
New Hampshire too wanted to apply for digital token tax payments, but the bills eventually never made it out of the state legislature.
This has been the case for Illinois, Georgia, and Arizona too, as they also took into consideration crypto tax payments.
Other crypto-friendly legislation included Miami and New York. The mayors of Miami and New York chose to take their first paychecks in Bitcoin. This approach attracted digital token businesses to these locations.