Today, Ohio reportedly becomes the first US state to allow taxes to be paid in the form of bitcoin. Although the program, which is spearheaded by Ohio Treasurer Josh Mandel, will not be available to individual taxpayers until a later time, businesses operating in Ohio are now able to register on OhioCrypto.com to pay 23 types of Ohio state taxes using bitcoin.
In the Office of the Ohio Treasurer's own words, this initiative represents Treasurer Mandel's belief "in leveraging cutting-edge technology to provide Ohioans more options and ease while interfacing with state government. The Treasurer's office is also working to help make Ohio a national leader in blockchain technology."
Bitcoin tax payments submitted on OhioCrypto.com will be processed through BitPay, a payment processing service provider, which will convert the bitcoin into US Dollars and then remit the cash to Ohio's coffers. To address bitcoin market price volatility, BitPay reportedly will lock the exchange rate for a 15-minute window once a business begins the payment process. The Ohio website's FAQs indicate the Treasurer's intention to add other cryptocurrencies to the tax payment options in the future.
As we noted in an earlier post, the making of a payment using digital assets such as bitcoin can itself be a taxable event, a consideration which businesses should factor into their analysis of whether (and when) to take advantage of Ohio's new option.
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