Colorado has become the first US state to accept bitcoin for tax payments.
Governor Jared Polis announced the rollout of the new payment method Monday, at Denver Startup Week, according to a report by Axios Denver.
According to the report, citizens can use cryptocurrencies to pay personal income tax, corporate income tax, sales and use tax, withholding tax, resource tax, and excise tax.
State government Department of Revenue now lists “cryptocurrency” as a payment method among the better established ACH and cash debit and credit cards.
However, users interested in splitting their bitcoin accounts for Colorado state taxes need to use a PayPal account.
“Only PayPal Personal accounts can pay with crypto,” Colorado Department of Revenue detailsadded that users need to have the full value of their invoice in a single cryptocurrency in their PayPal Crypto Hub.
Citizens paying taxes in crypto will have to pay an additional $1 plus 1.83% of the payment amount in fees.
U.S. states have been racing for the title of most crypto-friendly jurisdiction as they seek to attract workers and businesses of the new remote-first economy.
However, it’s hard to be the case for paying taxes in bitcoin, especially in light of Colorado’s fixed deal with PayPal. While users would likely forgo future capital appreciation to the bitcoin price by doing so, that purchasing power would not be transferred to Colorado as the state does not seek to keep BTC or crypto on the balance sheet. your accountant.