Governor Jared Schutz Polis recently stated that beginning this summer, Colorado will accept Bitcoin for tax payments. On Wednesday, Colorado Governor Jared Schutz Polis told CNBC that his administration is working fast to put in place a framework that will allow residents to pay their taxes in Bitcoin and other cryptocurrencies.
“We aim to take crypto for all of our state tax-related reasons by this summer, very shortly,” he stated.
The governor, who has long advocated for digital assets, particularly Bitcoin, went on to say that they were on their way, advising residents to remain calm as they considered how this would all work given the current price volatility of cryptocurrencies. Cryptocurrencies, he warned, continue to pose a risk of uncontrolled volatility, which could affect the value of crypto taxes paid.
“It’s critical that people understand that from a state perspective, we can’t be in the business of having exposure to a market where securities, including cryptocurrencies, flash away,” he said, adding that “our expenses are in dollars, so when we talk about accepting cryptocurrencies for payment, they’d be converted back into dollars for our purpose.”
To mitigate the negative effects of the volatility, he stated that they will hire an intermediary to “quickly” transfer the cryptocurrency to dollars.
Polis, who is also the first elected official in the United States to accept crypto campaign donations, said in May at a crypto conference that he would be “thrilled” to be the “first state to let you pay your taxes in a variety of cryptos,” and that he wanted Colorado to be the “next Silicon Valley.”
The governor vowed that the project would be expanded to other, more basic regions of the state in the future, in addition to allowing individuals to pay their taxes in Bitcoin.
“Within a few months, it may be as simple as a driver’s license or a hunting license,” he said, “but the most important set of transactions are the taxes that people pay, and we expect to accept crypto by this summer.”
As the use of cryptocurrencies grows around the world, particularly in the United States, governments are looking for ways to regulate the new industry, with taxation being a key focus. Watchdogs like the Internal Revenue Service have already begun taxing crypto holders who sell their coins or crypto-related property like NFTs, while countries like India have already enacted crypto taxation legislation.
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