Residents of the US state of Colorado have been able to fulfill their tax obligations in cryptocurrency, just as the Governor promised in February.
The state of Colorado is the first “shot” in the US to accept tax collection in crypto. According to the announcement, tax collections will be made through PayPal with a service fee of $1 plus 1.83% of the amount remitted to the agency. Currently, it is only possible to use personal accounts and businesses that do not have access to this payment gateway.
Although Paypal supports users to deposit, withdraw and hold a variety of cryptocurrencies, tax payments will only be made in USD. The governor of the state, Jared Polis, has made it clear that Colorado will not have direct exposure to cryptocurrencies because of the volatility of this market. Therefore, as a process of the tax payment system, the crypto will be converted back into USD by an intermediary before reaching the authorities.
Cryptocurrency payment options currently supported by PayPal include Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).
This development from Polis is not surprising as the governor, who was elected in 2019, is a longtime crypto advocate and one of the co-founders of the Congressional Blockchain Caucus in 2016.
“As a state, we’re on the forefront of digital innovation, whether it’s applying blockchain and shared-ledger technology as a new model for funding, or whether it’s simply being consumer-friendly and making sure that we allow for the kind of innovation that will disrupt legacy business practices and government practices to make them more efficient,”Polis said during an event this week, according to the Denver Business Journal.
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