As of today, Ohio becomes the first state in the US to allow businesses to pay taxes with bitcoin. Ohio edges out Arizona, Illinois, and Georgia which have seen similar initiatives fail to pass state legislatures.
The move is a stamp of legitimacy from the US authorities for a cryptocurrency that has, until recently, been derided as a mode of payment only useful for criminals, speculators, and money launderers.
We should point out that the government itself won’t directly accept or process bitcoin. It will be converted through a third-party payment provider, Bitpay, and the taxes will still technically be paid in dollars.
Individual Taxes to Follow
Businesses operating in Ohio will be the first to benefit from the new initiative. The state of Ohio has launched a new website, ohiocrypto.com where businesses can register and begin the tax payment process with bitcoin.
The site lists 23 taxes that are currently payable in cryptocurrency, including employee withholding taxes and sales taxes.
While it’s not yet possible fo individual filers to pay with bitcoin, the state of Ohio is working on it, as well as the potential to accept other cryptocurrencies.
“I do see [bitcoin] as a legitimate form of currency,”
Ohio Treasurer Josh Mandel is one of the few government voices to publicly champion cryptocurrencies. Speaking to the Wall Street Journal (paywall), he said “I do see [bitcoin] as a legitimate form of currency,” granting it some authority in the eyes of government.
Back in August, Ohio passed a law that legally recognized blockchain data, while Ohio speaker Ryan Smith confirmed Ohio’s grand plans: “because this is so new and this is just beginning to take shape, we can position Ohio out front.”
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No Legal Status, Yet
It’s important to note the move does not give bitcoin any legal status. In order to accept the payments, Ohio will use a third-party payment provider, BitPay, to convert bitcoin to US dollars. In other words, the state will not process or hold bitcoin itself. The taxes are still technically paid in dollars, just routed through a third-party.
While this is a stamp of approval for cryptocurrencies, it does not mean the government accepts or processes bitcoin directly.
Other States to Follow?
Ohio has kicked down the door and other states may soon follow suit. The Arizona Senate approved a similar bill earlier this year, but it was knocked back by the House of Representatives.
Representatives in Illinois also submitted a proposal to accept bitcoin back in February, while two state senators in Georgia proposed a similar bill in early 2018.
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