The ways in which you can spend bitcoin continues to increase as the cryptocurrency becomes increasingly mainstream. Soon, you could be able to pay your taxes using bitcoin.
Two U.S. states have announced they are now considering bills that would make that option possible. Utah became one of the first states to consider such legislation when a bill in support of payment options, including accepting bitcoin as a valid form of payment, was introduced. Across the country, state representatives in New Hampshire collaborated to introduce a bipartisan bill that would allow the state to official accept the cryptocurrency for fees and taxes. 1 Before the state would be able to official accept bitcoin; however, a detailed implantation plan would need to be developed.
Why the push for State Governments to accept bitcoin for tax payments?
Advocates of such legislation have been quick to point out that states opting to accept bitcoin for the purposes of tax payments would be able to enjoy an economic boon, as bitcoin transactions are much less expensive as well as more secure than payments made via credit card. While it has often seemed as though governments remains somewhat suspicious of the adoption of any type of cryptocurrency, such emerging technologies have continued to play an ever increasing role in both culture and the economy. In order to stay ahead of the times, many supporters of bitcoin believe that state governments must remain open to the option of new technologies.
It should come as little surprise that Utah is one of the states considering accepting bitcoin for tax payments, considering that Overstock.com, one of the first major online retailers to accept bitcoin, is located in Utah.
Utah and New Hampshire are certainly not the only areas where bitcoin is under consideration as an acceptable form of payment. A bill was also recently introduced in New York City that would allow residents to use bitcoin to pay fines and fees. According to a local council member, the move came about after realizing just how much money New York City is losing via credit card transaction fees, a total of several million dollars annually. By making the move to accept bitcoin for tax payments, New York City is hoping to eliminate at least some of the funds lost each year due to credit card payment processing fees.
Paying IRS taxes with bitcoin?
Earlier this year, SnapCard, a bitcoin-based shopping card announced the expansion of its service offerings with the launch of a service that would make it possible for customers to pay the IRS with bitcoin. The process works by giving SnapCard users the ability to pay taxes using bitcoin, while the shopping cart company behind the service processes USD transactions using a payment processor.
To date, the federal government has remained wary of embracing any type of virtual currency. In fact, the IRS does not currently accept bitcoin payments for tax obligations. It was not until SnapCard expanded its services that customers were able to use their bitcoin wealth to pay the IRS. If there is a drawback to using SnapCard's service, it is that a processing fee does apply, whereas the IRS currently does not charge a processing fee when taxpayers opt to pay their tax obligations using a credit card.
State governments in the United States are not alone in considering making the move to bitcoin-based payments for taxes. The Isle of Man (U.K.) has also recently announced that residents will be able to pay everything from income tax bills to vehicle taxes with bitcoin.
1) Forbes.com. Paying Your Taxes In Bitcoin? Bill Would Make It Easy.