By accepting Bitcoin and Ethereum for tax reasons, Colorado is doubling down on its interest in crypto and blockchain technology.
The Governor of Colorado, Jared Polis, recently revealed plans to embrace cryptocurrencies as a form of tax payment. Colorado may even follow Miami Mayor Francis Suarez’s lead and create its own cryptocurrency token.
Colorado Governor @jaredpolis announces that the state government plans to allow residents to pay taxes in cryptocurrencies as early as summer 2022.— Cointelegraph (@Cointelegraph) February 16, 2022
Could the state become the crypto capital of the United States?
(Reporting via @onceatraveler) https://t.co/LEiInamuK3
Colorado and Crypto Taxes
On Tuesday, the governor discussed his thoughts on cryptocurrency acceptance in an interview with CNBC. New legislation called the Digital Token Act will exempt his state from securities laws when it comes to virtual currency transactions. However, Colorado will remain subject to SEC oversight due to the fact that federal securities rules will continue to apply.
When the state receives cryptocurrency as part of a crypto-tax payment system, a middleman would convert it back to dollars. Innisfil, a Canadian city, entered a one-year trial agreement with Coinberry exchange to provide a comparable service back in 2019. Although taxpayers could use Bitcoin, the municipality would convert and store it in dollars.
The governor referenced both Bitcoin and Ethereum as assets that may be “paid and converted in real-time” but did not specify which cryptocurrencies state will accept.
What’s New in Crypto in Colorado?
For many years, the state of Colorado has exhibited a keen interest in cryptocurrency and blockchain technologies. A Denver pilot program accepting Bitcoin payments at select Quiznos locations began in October, thanks to the city’s partnership with the restaurant chain. An app allowing overseas military personnel to vote in municipal elections was launched by the same city in 2019 and collected roughly 8,000 ballots.