We have written, several times, about governments that are working with Blockchain technology and cryptocurrencies. Different universities and enterprises are embracing cryptocurrencies and blockchain in order to provide more efficient products and services. Now, a new bill submitted to the Arizona Senate, proposes to allow people pay their taxes using Bitcoin or other cryptocurrencies.
Paying Taxes with Cryptocurrencies
According to the text, individuals would be able to pay with bitcoin or other cryptocurrencies ‘using peer-to-peer systems’. In this way, taxes and any interest and penalties owed to the state government may be paid with these virtual currencies.
The bill states:
“The Department shall convert cryptocurrency payments to United States dollars at the prevailing rate within twenty-four hours after receipt and shall credit the taxpayer’s account with the converted dollar amount.”
This is not the first time that a bill to pay taxes with cryptocurrencies is presented in the United States. Something similar happened in New Hampshire in 2016, when lawmakers presented a similar bill. But the volatility of the cryptocurrency didn’t allow this to be a reality, and the bill was scuttled.
Besides this law, in Arizona different laws about Blockchain and technology have been approved. For example, blockchain signatures and smart contracts have been recognized as valid under state law.
It is not clear whether the bill will last or not, but it is important to see that governments are embracing Bitcoin, and other virtual currencies. While many believe that governments can only regulate Bitcoin, the facts show that it is being used as a daily means of payment everywhere and by different entities.
Until the government allows cryptocurrency to be used for paying taxes on federal level, most of the popular free tax software programs will likely not include this option. With that being said, a CPA or financial professional might be the most favorable option in local jurisdictions that allow cryptocurrency payments.
More Legitimacy for Cryptocurrencies
This bill brings more legitimacy to the cryptocurrency world. With the bitcoin futures spreading, with more universities accepting cryptocurrencies, and more and more enterprises using virtual currencies, the cryptocurrency environment expands.
Businesses are finding it easier to use cryptocurrencies rather than fiat. Transactions are faster, cheaper and are secured by the network. Central Banks are analysing the possibility of using blockchain technology to process payments. Since the last year, the market has increased in volume and use.
As the legitimacy of digital currency continues to expand, regulation will expand as well. Make sure to stay up-to-date on all crypto tax changes and use a crypto tax software to simplify your tracking
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