While cryptocurrency has left many people skeptical of its value, the American government is validating its use with some surprising changes in taxes. In the last few years, states have been racing to make cryptocurrency mainstream, in hopes that one day Americans can use it to pay their taxes.
Which states would allow tax payments in cryptocurrency?
So far, only two states have active proposals that are being negotiated: Arizona and Wyoming. Wyoming has surpassed other states in passing laws that favor of cryptocurrency. However, these aren’t the only states considering adopting digital currency as a form of tax payment.
33 states considered proposals last year, with Wyoming leading the way by establishing groundwork. Gov. Jared Polis of Colorado has expressed excitement around the state’s interest in being “the first state to let you pay your taxes in a variety of cryptos.”
Ohio was actually the first state to announce that businesses could pay taxes in Bitcoin back in 2018. Unfortunately, that service was shutdown and declared illegal within the same year.
How will cryptocurrency impact the economy?
State and local leaders are hoping that the broad acceptance of blockchain wallets will create jobs and finance various projects for the public. More people would be likely to pay their taxes with the extra income they receive in crypto.
The future of cryptocurrency in America
There is a partisan divide surrounding crypto regulations and taxes. Despite party representation, there appears to be examples of skepticism and support. The discussion is being compared to that of the cannabis market. Politicians are figuring out how to regulate crypto, and how much it should be regulated.
Wyoming’s proposal is backed by Merchant Advisory Group, which is a trade group that includes reputable companies such as Walmart and Amazon. This can sway the broad appeal and gain the support of more retailers.
More information
Whatever cryptocurrency’s role will be in mainstream society, it still affects your taxes. If you have a tax liability and require assistance, give us a call at (800) 536-0734 for a free consultation.
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