Colorado state’s Department of Revenue now accepts tax payments in form of Cryptocurrency. This makes the U.S. state of Colorado yet another participant in the race to bring about real-world adoption of cryptocurrency usage. Many U.S. states have tried to bring about crypto-friendly business environments and the adoption of cryptocurrency payments for tax purposes in the past. But these ventures ended up in failure either due to legal complications or due to bills not making it past state legislature. But, continued attempts are being made by various cryptocurrency friendly and digital assets enthusiastic politicians in a bid to attract more workers and businesses in this industry to their states.
Colorado State Governor Jared Polis has become the latest politician to succeed in this race and he made good on his promise from earlier this year when he announced that residents can now pay taxes in cryptocurrency during the first day of Denver start-up week. While individuals can pay taxes using digital assets, the feature is currently unavailable for businesses at the moment. Those who wish to use cryptocurrencies to make tax payments can choose to do so via online payment portal using a PayPal account. The taxes supported under this payment mode include — individual income tax, business income tax, sales and use tax, withholding tax, severance tax and excise fuel tax.
Those who wish to make payments using cryptocurrencies would require a PayPal personal account and they need to have the entire value of their invoice in a single cryptocurrency in their PayPal cryptocurrencies Hub. This is because the state government is unable to and doesn’t seek to hold cryptocurrencies on their balance sheet owing to various legal and regulatory issues surrounding these digital assets. The entire transaction process takes three to five days when payment is made in cryptocurrencies as any payments made using cryptocurrencies via PayPal will be converted to fiat before being received by the revenue department. However, tax payments will be considered effective on the same day when payment transactions were initiated.
Payments made using PayPal cryptocurrency Hub will see an additional charge of $1 plus 1.83% of the payment amount in fees. Governor Jared Polis is a well-known long-time crypto supporter and an entrepreneur who staunchly advocates for the tech industry. Polis has begun fundraising for his re-election campaign by selling NFTs for the price of US$ 52.80 and these NFTs are expected to act as tickets to get donors into an event where Polis is expected to explain the meaning of Easter eggs hidden inside his NFT. Some of the other U.S. states which tried to bring about cryptocurrency adoption into the real world in the past include — Ohio, New Hampshire, Georgia, Illinois and Arizona.