Ohio has said that it will now allow taxpayers to pay their outstanding liabilities in bitcoin, in a landmark move that could pave the way for similar rulings from states nationwide.
In deciding to accept payment in bitcoin, Ohio becomes the first US state to embrace tax payments in cryptocurrency, with a range of different taxes eligible for payment in crypto.
According to reports emerging this week, companies in Ohio are now able to turn to bitcoin for paying public utilities tax, employees withholding tax and even some sales taxes, in a move that could encourage other tax authorities to engage with cryptocurrency payments.
Those paying by bitcoin are first required to register with Ohio state authorities, with a dedicated website set up at OhioCrypto.com to facilitate registration with the Office of the Ohio Treasurer.
To make a payment, users then need to enter a few details such as the relevant tax period and the amount, before sending payment through a compliant cryptocurrency wallet, such as breadwallet or Mycelium.
Payments are processed in connection with BitPay, which handles on-the-fly conversions – including, in this case, on behalf of the Office of the Ohio Treasurer, who can then withdraw funds as fiat currency.
For the time being, the scheme is only being offered to businesses, but there is the suggestion that individual residents of Ohio could be included in a future rollout of the platform.
It is foreseeable this could drive local demand for bitcoin in Ohio, at a time of comparatively weak trading for bitcoin over the last few months. The decision can also be read as a vote of confidence in bitcoin as a technology and payment method, irrespective of volatility in the world’s foremost cryptocurrency market.
Lawmakers elsewhere in the US will be watching developments in Ohio closely, with a number of other states known to be considering or even legislating on similar proposals to recognize bitcoin as a legitimate payment method for tax bills.
Arizona was pursuing similar measures until the measure failed to secure a threshold number of votes, while Georgia suspended its earlier bid for a bill, deferred until lawmakers could establish a “better understanding” of bitcoin, cryptocurrency and associated technologies.