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Colorado to become first state to accept cryptocurrency for tax payments

109 points by elpakal 5y ago

acosmism 5y ago
apparently this content is not viewable from where i am lol
- aaaaaaaaata 5y ago
  Is "where I am" a GDPR country?
MilnerRoute 5y ago
So Colorado is accepting all crypto.... ... "for the payment of state tax and fees." The original article's headline just says "payment" -- but it's not the entire universe of all payments. Having said that, Colorado's governor is very pro-crypto (and pro-technology in general)...
- elpakal 5y ago
  I changed the title to say Crypto instead of Bitcoin
  - TheDudeMan 5y ago
    You missed the point. Title should say "tax payments".
    - elpakal 5y ago
      The title says almost exactly what the article title says, I’m not going to add words
endisneigh 5y ago
It’s funny watching the United States weaken its own currency. People in the far future will read the history books with great amusement. Like, in what way does this benefit Colorado or the United States?
- Dwolb 5y ago
  I don’t understand how this statement can be stated confidently. “People in the far future will read the history books with great amusement.” Who knows what’s going to happen in the far future?
  - deepvibrations 5y ago
    Exactly, a very arrogant and short sighted comment. Though one I would expect in a thread about crypto currency. I believe many have a strong hatred for Bitcoin etc, as they missed out on an opportunity to make a LOT of money, or simply know others that made a lot and feel some jealousy. It's just a technology and for all we know, some larger distrust may arise in governments that leads to people using crypto more and although a very small chance, bitcoin may become the most commonly used currency. My point being, we just don't know and cannot predict these things.
    - endisneigh 5y ago
      > I believe many have a strong hatred for Bitcoin etc, as they missed out on an opportunity to make a LOT of money, or simply know others that made a lot and feel some jealousy Yes the only reason someone can make this comment is because they’re jealous of all the money they missed out on. By the way, the word you’re looking for is envy, not jealousy smh.
      - deleted 5y ago
        [deleted]
    - Retric 5y ago
      I started mining Bitcoin before video card mining was a thing, and I thought it was a bad idea back then. It’s isn’t about making money, it’s a question of what Bitcoin is and how it works.
      - deepvibrations 5y ago
        Congrats, then you should understand that even if Bitcoin doesn't make it, some other form cryptocurrency probably will.
dghlsakjg 5y ago
> Polis said the state is getting a payment provider to accept crypto equivalent and deposit the money into the state’s treasury for that amount. Colorado won’t be accepting bitcoin. They will be accepting dollars from a payment processor that accepts bitcoin. Your tax bill will still be in dollars, and at the end of the day you will be responsible for ensuring that the correct number of dollars ends up in state coffers. This is the same as saying that Colorado will now be accepting Canadian Dollars and Peruvian Soles because I can use a foreign denominated credit card with their cc processor.
- aaaaaaaaata 5y ago
  I'd consider it a win if I was using any of those currencies. You seem to be trying to make this not a win for cryptocurrency. It is. Sorry.
  - babygoat 5y ago
    Is it really a “win” if no one else is playing?
- rafale 5y ago
  Does sending Bitcoin to the payment processor count as a taxable event for you since the bitcoin will be sold for dollars? If not, that's a big deal.
  - endisneigh 5y ago
    Yea.
  - Retric 5y ago
    It counts as a taxable event.
  - atlantas 5y ago
    “In Colorado, we’ve been laying the groundwork to be a center of crypto and blockchain innovation for a number of years. We see it as a critical part of Colorado’s overall innovation ecosystem,” shared Polis. If the governor is serious about this he will push to remove the tax, as some countries have. It'll be hard to be the center of crypto innovation while taxing transactions.
tnzk 5y ago
> “It is kind of like credit card payments, with the bonus that there are no returned payments,” Polis said. For me (live outside US) this sounds a little strange, are returned payments on tax payments happen so often that a governor has to mention it?
- Dwolb 5y ago
  I’d guess the complexity of operations around returned payments are outsized compared to their dollar value. eg if 1% of payments are returned, they need to devote 10% of their operational overhead to it.
- acdha 5y ago
  It affects processing overhead rates. Even if you have a very low rate of returns you are paying the bank for the possibility that this would happen, so I can easily understand someone looking at a charge which adds up to n million dollars a year and thinking it’s worth saving.
ed25519FUUU 5y ago
> “It is kind of like credit card payments, with the bonus that there are no returned payments,” Polis said. If the Bitcoin was stolen or used fraudulently aren’t you still required to return it?
- buzzdenver 5y ago
  I'm guessing the payment processor has to swallow the losses in that case. It's clear from the FB post that Colorado is getting USD, not BTC.
- sowbug 5y ago
  Like cash, paying with Bitcoin doesn't make anything illegal legal. But unlike a check, wire transfer, or credit-card payment, there is no intermediary like a bank that might autonomously decide to reverse a transaction. If you steal Bitcoin and use it to pay your Colorado state taxes, you remain liable (1) to the government for your theft, and (2) to the person you stole from for "conversion" of their Bitcoin. The first is a criminal issue (government comes after you); the second is a civil one (person comes after you). But Colorado's revenue agency doesn't care; they got paid and they get to keep it. If you make up a fake credit-card number and use it to pay your Colorado state taxes, then the bank will eventually figure out what happened and reverse the transaction. Then the Colorado Department of Revenue will come after you for unpaid taxes (as well as for other misdeeds you have committed). Note that Colorado isn't receiving Bitcoin directly, but rather is using a digital-currency payment processor. That company might decide to reverse iffy transactions. The problem is that the company can't reverse the Bitcoin transaction. They might decide, as part of their business model, to absorb the costs of fraudulent/illegal transactions and pass the (negative) savings onto the customer through fees. But they can't reverse Bitcoin transactions, any more than someone can command cash to fly out of the recipient's pocket and back into their own.
  - shkkmo 5y ago
    > Like cash, paying with Bitcoin doesn't make anything illegal legal. But unlike a check, wire transfer, or credit-card payment, there is no intermediary like a bank that might autonomously decide to reverse a transaction. Unlike cash, but like any other stolen asset, if you unknowingly receive stolen bitcoin, you could still be legally required to return those bitcoins to the original owner. > But they can't reverse Bitcoin transactions, any more than someone can command cash to fly out of the recipient's pocket and back into their own. If "they" is a court, they absolutely can command you to take cash out of your pocket or to reverse a transaction you received.
civilized 5y ago
Guy has too much time on his hands.
rvz 5y ago
If you can't see it from outside of the US: https://archive.is/IvHg3 https://archive.is/IvHg3 Announcement also on Facebook: [0] [0] https://www.facebook.com/jaredpolis/posts/486922196339837 https://www.facebook.com/jaredpolis/posts/486922196339837
nixpulvis 5y ago
Boooo Seriously though, a state announcement on Facebook reposted in a tabloid style website without any of the pertinent information, like what currencies are being considered, perfectly sums up the problems with information technology. I should be reading www.colorado.gov As for the crypto, this seems like a nice way for the state to collect and keep tabs on cash flow. So good on them for being smart I guess. Is it actually easier for people? No. But a lot of people did get sucked into this crypto thing, so you move where the money is.
- vkou 5y ago
  It doesn't sun up the problem with IT, it sums up the problem with bias in media. Why do you think this article both misrepresents the situation, omits mentioning federal tax implications of paying in this manner, and is not on a Colorado government site? Cui bono? The answer is: 'Because this is a submarine article targeted at crypto shills, by crypto shills.'
CompleteWalker 5y ago
I don't know the specifics, but my assumption is that this has something to do with the taxing the cannabis industry. The SAFE Banking act still hasn't passed. As far as I know, the cannabis industry is cash only. If anyone has any further reading about this, I'm interested. EDIT: Less wordy, easier to read.
TheDudeMan 5y ago
In the absence of a carbon tax, they should not be supporting proof-of-work.
whoopdedo 5y ago
Perhaps a stealthy way to identify who's under-reporting their gains? If your payment comes in through crypto it gets flagged for extra scrutiny, so if they don't see a sufficient reporting of where the crypto came from, they prioritize you for an audit.
qgin 5y ago
Fun theory: the only reason the USD has intrinsic value is because it is required for paying taxes for anyone living or doing business in the United States. It puts a legally-mandated floor on the demand for the dollar and provides the assurance that whatever happens in the world, as long as the US government is still standing and the US is an important place to do business, there will be demand for dollars. If the federal government ever allows other forms of payment for taxes, the USD would be able go to zero as easily as any crypto can today.
naveen99 5y ago
Imagine if the government had a public receivable account for each line item in the budget that you could voluntarily pay into, and make it count 75% (or titratable percentage) as regular tax payment.
aml183 5y ago
Colorado is the second state to do this. I worked on an initiative in Ohio. https://www.google.com/amp/s/www.wsj.com/amp/articles/pay-taxes-with-bitcoin-ohio-says-sure-1543161720 https://www.google.com/amp/s/www.wsj.com/amp/articles/pay-ta...

109 points by elpakal 5y ago

acosmism 5y ago

apparently this content is not viewable from where i am lol

aaaaaaaaata 5y ago
Is "where I am" a GDPR country?

MilnerRoute 5y ago

So Colorado is accepting all crypto.... ... "for the payment of state tax and fees." The original article's headline just says "payment" -- but it's not the entire universe of all payments. Having said that, Colorado's governor is very pro-crypto (and pro-technology in general)...

elpakal 5y ago
I changed the title to say Crypto instead of Bitcoin
- TheDudeMan 5y ago
  You missed the point. Title should say "tax payments".
  - elpakal 5y ago
    The title says almost exactly what the article title says, I’m not going to add words

endisneigh 5y ago

It’s funny watching the United States weaken its own currency. People in the far future will read the history books with great amusement. Like, in what way does this benefit Colorado or the United States?

Dwolb 5y ago
I don’t understand how this statement can be stated confidently. “People in the far future will read the history books with great amusement.” Who knows what’s going to happen in the far future?
- deepvibrations 5y ago
  Exactly, a very arrogant and short sighted comment. Though one I would expect in a thread about crypto currency. I believe many have a strong hatred for Bitcoin etc, as they missed out on an opportunity to make a LOT of money, or simply know others that made a lot and feel some jealousy. It's just a technology and for all we know, some larger distrust may arise in governments that leads to people using crypto more and although a very small chance, bitcoin may become the most commonly used currency. My point being, we just don't know and cannot predict these things.
  - endisneigh 5y ago
    > I believe many have a strong hatred for Bitcoin etc, as they missed out on an opportunity to make a LOT of money, or simply know others that made a lot and feel some jealousy Yes the only reason someone can make this comment is because they’re jealous of all the money they missed out on. By the way, the word you’re looking for is envy, not jealousy smh.
    - deleted 5y ago
      [deleted]
  - Retric 5y ago
    I started mining Bitcoin before video card mining was a thing, and I thought it was a bad idea back then. It’s isn’t about making money, it’s a question of what Bitcoin is and how it works.
    - deepvibrations 5y ago
      Congrats, then you should understand that even if Bitcoin doesn't make it, some other form cryptocurrency probably will.

dghlsakjg 5y ago

> Polis said the state is getting a payment provider to accept crypto equivalent and deposit the money into the state’s treasury for that amount. Colorado won’t be accepting bitcoin. They will be accepting dollars from a payment processor that accepts bitcoin. Your tax bill will still be in dollars, and at the end of the day you will be responsible for ensuring that the correct number of dollars ends up in state coffers. This is the same as saying that Colorado will now be accepting Canadian Dollars and Peruvian Soles because I can use a foreign denominated credit card with their cc processor.

aaaaaaaaata 5y ago
I'd consider it a win if I was using any of those currencies. You seem to be trying to make this not a win for cryptocurrency. It is. Sorry.
- babygoat 5y ago
  Is it really a “win” if no one else is playing?
rafale 5y ago
Does sending Bitcoin to the payment processor count as a taxable event for you since the bitcoin will be sold for dollars? If not, that's a big deal.
- endisneigh 5y ago
  Yea.
- Retric 5y ago
  It counts as a taxable event.
- atlantas 5y ago
  “In Colorado, we’ve been laying the groundwork to be a center of crypto and blockchain innovation for a number of years. We see it as a critical part of Colorado’s overall innovation ecosystem,” shared Polis. If the governor is serious about this he will push to remove the tax, as some countries have. It'll be hard to be the center of crypto innovation while taxing transactions.

tnzk 5y ago

> “It is kind of like credit card payments, with the bonus that there are no returned payments,” Polis said. For me (live outside US) this sounds a little strange, are returned payments on tax payments happen so often that a governor has to mention it?

Dwolb 5y ago
I’d guess the complexity of operations around returned payments are outsized compared to their dollar value. eg if 1% of payments are returned, they need to devote 10% of their operational overhead to it.
acdha 5y ago
It affects processing overhead rates. Even if you have a very low rate of returns you are paying the bank for the possibility that this would happen, so I can easily understand someone looking at a charge which adds up to n million dollars a year and thinking it’s worth saving.

ed25519FUUU 5y ago

> “It is kind of like credit card payments, with the bonus that there are no returned payments,” Polis said. If the Bitcoin was stolen or used fraudulently aren’t you still required to return it?

buzzdenver 5y ago
I'm guessing the payment processor has to swallow the losses in that case. It's clear from the FB post that Colorado is getting USD, not BTC.
sowbug 5y ago
Like cash, paying with Bitcoin doesn't make anything illegal legal. But unlike a check, wire transfer, or credit-card payment, there is no intermediary like a bank that might autonomously decide to reverse a transaction. If you steal Bitcoin and use it to pay your Colorado state taxes, you remain liable (1) to the government for your theft, and (2) to the person you stole from for "conversion" of their Bitcoin. The first is a criminal issue (government comes after you); the second is a civil one (person comes after you). But Colorado's revenue agency doesn't care; they got paid and they get to keep it. If you make up a fake credit-card number and use it to pay your Colorado state taxes, then the bank will eventually figure out what happened and reverse the transaction. Then the Colorado Department of Revenue will come after you for unpaid taxes (as well as for other misdeeds you have committed). Note that Colorado isn't receiving Bitcoin directly, but rather is using a digital-currency payment processor. That company might decide to reverse iffy transactions. The problem is that the company can't reverse the Bitcoin transaction. They might decide, as part of their business model, to absorb the costs of fraudulent/illegal transactions and pass the (negative) savings onto the customer through fees. But they can't reverse Bitcoin transactions, any more than someone can command cash to fly out of the recipient's pocket and back into their own.
- shkkmo 5y ago
  > Like cash, paying with Bitcoin doesn't make anything illegal legal. But unlike a check, wire transfer, or credit-card payment, there is no intermediary like a bank that might autonomously decide to reverse a transaction. Unlike cash, but like any other stolen asset, if you unknowingly receive stolen bitcoin, you could still be legally required to return those bitcoins to the original owner. > But they can't reverse Bitcoin transactions, any more than someone can command cash to fly out of the recipient's pocket and back into their own. If "they" is a court, they absolutely can command you to take cash out of your pocket or to reverse a transaction you received.

civilized 5y ago

Guy has too much time on his hands.

rvz 5y ago

If you can't see it from outside of the US: https://archive.is/IvHg3 https://archive.is/IvHg3 Announcement also on Facebook: [0] [0] https://www.facebook.com/jaredpolis/posts/486922196339837 https://www.facebook.com/jaredpolis/posts/486922196339837

nixpulvis 5y ago

Boooo Seriously though, a state announcement on Facebook reposted in a tabloid style website without any of the pertinent information, like what currencies are being considered, perfectly sums up the problems with information technology. I should be reading www.colorado.gov As for the crypto, this seems like a nice way for the state to collect and keep tabs on cash flow. So good on them for being smart I guess. Is it actually easier for people? No. But a lot of people did get sucked into this crypto thing, so you move where the money is.

vkou 5y ago
It doesn't sun up the problem with IT, it sums up the problem with bias in media. Why do you think this article both misrepresents the situation, omits mentioning federal tax implications of paying in this manner, and is not on a Colorado government site? Cui bono? The answer is: 'Because this is a submarine article targeted at crypto shills, by crypto shills.'

CompleteWalker 5y ago

I don't know the specifics, but my assumption is that this has something to do with the taxing the cannabis industry. The SAFE Banking act still hasn't passed. As far as I know, the cannabis industry is cash only. If anyone has any further reading about this, I'm interested. EDIT: Less wordy, easier to read.

TheDudeMan 5y ago

In the absence of a carbon tax, they should not be supporting proof-of-work.

whoopdedo 5y ago

Perhaps a stealthy way to identify who's under-reporting their gains? If your payment comes in through crypto it gets flagged for extra scrutiny, so if they don't see a sufficient reporting of where the crypto came from, they prioritize you for an audit.

qgin 5y ago

Fun theory: the only reason the USD has intrinsic value is because it is required for paying taxes for anyone living or doing business in the United States. It puts a legally-mandated floor on the demand for the dollar and provides the assurance that whatever happens in the world, as long as the US government is still standing and the US is an important place to do business, there will be demand for dollars. If the federal government ever allows other forms of payment for taxes, the USD would be able go to zero as easily as any crypto can today.

naveen99 5y ago

Imagine if the government had a public receivable account for each line item in the budget that you could voluntarily pay into, and make it count 75% (or titratable percentage) as regular tax payment.

aml183 5y ago

Colorado is the second state to do this. I worked on an initiative in Ohio. https://www.google.com/amp/s/www.wsj.com/amp/articles/pay-taxes-with-bitcoin-ohio-says-sure-1543161720 https://www.google.com/amp/s/www.wsj.com/amp/articles/pay-ta...