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.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized. The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage.

article-image

New short and long-term priorities include L1 gas boosts, ZK-EVMs, privacy reads, and a lean, quantum-resistant Ethereum

by Blockworks /
article-image

The new stBTC token redistributes Bitcoin gas fees to users, creating liquid yield without inflation or lockups

by Blockworks /
article-image

The reserve will collect protocol revenues to back W token, alongside new yield and unlock schedule

by Blockworks /
article-image

Layer 2 network Taiko integrates Chainlink Data Streams to deliver reliable onchain market data for DeFi and institutions

by Blockworks /
article-image

The license will allow Bullish to operate in New York under strict digital asset rules

by Blockworks /
article-image

The derivatives giant expands crypto offerings with new Solana and XRP futures options, pending regulatory review

by Blockworks /