Colorado’s governor revealed Wednesday that the state is considering accepting cryptocurrencies for tax payments years after becoming the first state to deploy blockchain technology in government infrastructure.
In an interview ahead of the ETHDenver conference on Wednesday, Colorado Governor Jared Polis said, “We are pushing Colorado as the heart of the crypto economy.”
By the end of this summer, Polis said, the state aims to accept cryptocurrency for state tax payments and other state transactions, such as to permit and licensing fees. He noted that Colorado would need to work with a crypto firm to accept and convert cryptocurrencies.
Polis added to his conversation that they will still carry out budgeting and expenditures in dollars. He continued his discussion by stating that they wouldn’t want to accept the speculative risk of owning crypto. For the customer’s convenience, he would make sure that they will accept payments in various cryptocurrencies.
Colorado setting a pathway for widespread adoption
“Colorado’s decision to accept cryptocurrency for state tax payments and other government levies demonstrates crypto’s widespread popularity as an investment and payment mechanism,” stated Kell Canty, CEO of Ledgible. “Of course, utilizing cryptocurrency to pay taxes does not affect the transaction’s tax status under federal or state law.”
According to legal experts, the taxpayer will keep track of these transactions and assess tax responsibilities. Preston Byrne, a lawyer at law firm Anderson Kill, added to her point that “for whom the disposal of crypto is a tax event that will cause a gain or loss that must be accounted for in the following tax year.”
Colorado is attractive to digital asset firms because of its lower taxes and more forgiving crypto-related regulatory standards, according to Polis.
Polis said that when it comes to giving possibilities for innovation in our area, they are battling the feds wherever they can. He continued that rather than infringing on people’s rights and freedoms, the state serves to protect them.
He also mentioned various blockchain efforts he supports to upgrade government infrastructure, affecting services ranging from agriculture to digital citizenship, in addition to allowing crypto payments for taxes by this summer.