Residents of Colorado are now able to pay state taxes using bitcoin and other cryptocurrencies, but only if they have a PayPal account.
The first American state to accept bitcoin for tax payments is Colorado. According to a report by Axios Denver, Gov. Jared Polis announced the adoption of the new payment mechanism on Monday during Denver Startup Week.
Individual income tax, company income tax, sales and use tax, withholding tax, severance tax, and excise fuel tax are all tax types that citizens can pay with bitcoin, according to the research.
In addition to the more well-known debit and credit cards, ACH debit and credit, and cash, the state government’s Department of Revenue also accepts “cryptocurrency” as payment.
Users who wish to use their bitcoin holdings to pay Colorado state taxes must, however, use a PayPal account.
Colorado’s Department of Revenue explains that “only PayPal Personal accounts can pay using cryptocurrencies,” adding that the user must have the full amount of their invoice in a single cryptocurrency in their PayPal Cryptocurrencies Hub.
Cryptocurrency tax payers will pay 1.83% of their payment amount in fees in addition to an additional $1.
As they compete to entice employees and firms in the new remote-first economy, U.S. states have raced for the prize of the most cryptocurrency-friendly jurisdiction.
However, it is challenging to justify paying taxes in bitcoin, particularly given Colorado’s predetermined partnership with PayPal.
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