Colorado residents had the opportunity to pay their state income taxes with cryptocurrency this year after Governor Jared Polis introduced changes in September. Despite the cryptocurrency option, only 11 residents paid the taxes in the said method by April 14, out of 3.1 million individual tax returns.

The applicable taxes range from individual and business taxes to withholdings, severance, and excise fuel taxes. People who choose cryptocurrency have to go through PayPal as the payment provider deposits dollars in the state’s treasury. Any fee that may incur can be compared to those of a credit card’s. Furthermore, residents may be subjected to capital gains tax if the price of the cryptocurrency–bitcoin, ethereum, litecoin or bitcoin cash–rises since the time of purchase.

Polis has long shown his support for blockchain technology. Last 2019, he signed the Cryptocurrency Exemption Colorado Digital Token Act, which eliminates the need for securities registration and broker-dealer licensing requirements for those dealing in digital tokens.

Altogether, the introduction of cryptocurrency payments emphasizes Colorado’s commitment to digital innovation. Unfortunately, not many people seem to take advantage of the opportunity, perhaps due to the fees and taxes involved. As digital technology moves forward this modern age, one can only hope that more residents will benefit from the use of cryptocurrency.



Other News from Today