Only 11 Colorado Residents Paid Their State Income Taxes With Crypto This Year

Last September, Governor Jared Polis announced that Colorado residents could pay state taxes with crypto

article-image

Ahmed Zaggoudi/Shutterstock modified by Blockworks

share

Residents of Colorado are able to pay their state income taxes in select cryptocurrencies. This is the first year that residents are able to use this method, after Governor Jared Polis announced the change last September. 

However, as reported by 5280, only 11 residents opted to pay their state income taxes with crypto by April 14. In 2020, Colorado had 3.1 million individual tax returns.

Applicable taxes include individual and business taxes, withholdings, severance and excise fuel taxes. 

Residents who choose to pay their taxes with crypto have to go through PayPal so that the payment provider can “deposit dollars into the state’s treasury,” according to a tweet from Polis’ Twitter account last year.

“Our budget is still in dollars, our expenditures are still in dollars, and, of course, we don’t want to take the speculative risk of holding crypto, so we will be having a transactional layer there,” Polis said in an ETHDenver conference last February. “It will be entering our systems as dollars. For consumer convenience, we want to accept payments in a wide variety of cryptocurrencies.” 

And there are fees that are tied to paying with crypto — similar to the fees associated with paying by credit card. Transactions have a fee of $1, as well as 1.83% of the total, according to the Department of Revenue. 

Not to mention that residents may be taxed for using the crypto if the crypto used–PayPal currently supports bitcoin, ethereum, litecoin and bitcoin cash–has gone up in price since the resident bought it thanks to capital gains taxes.

Polis has been a supporter of blockchain technology for a number of years. In 2019, he signed an act called the Cryptocurrency Exemption Colorado Digital Token Act, which “provides limited exemptions from the securities registration and securities broker-dealer and salesperson licensing requirements for persons dealing in digital tokens”

Colorado’s Department of Revenue did not immediately respond to a request for comment.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million