Josh Mandel Ohio’s State Treasurer has made it possible for taxes to be paid in Bitcoin for businesses. This is the first time something like this has happened in a state of America. Through the server BitPay business owners will soon be able to settle tax liabilities completely online through payments processed through BitPay.
Mandel has always supported the combining of new technology in the state system. Back in 2014 he launched OhioCehckbook which gave the public full access to the spending information of the state government. The State Treasurer has been a crypto supporter for a few years and hopes it will spread to the whole of the United States. “Here in the United States, states are the laboratories for democracy, and I think this is a perfect illustration of this concept — where this idea is beginning at a state level in Ohio, but the ultimate goal is to inspire the federal government to follow suit. I hope what we’re doing in Ohio will inspire states around the country to allow their taxpayers to pay in cryptocurrency and ultimately inspire the federal government to pay federal taxes with crypto as well.”
The online portal will allow businesses to pay 23 different types of taxes through Bitcoin. Some of the taxes include:
- 911 Wireless
- Cigarette / Other Tobacco Products
- Commercial Activity (CAT)
- Consumer’s Use
- Direct Pay Permit
- Financial Institution (FIT)
- Interest on Lawyers Trust Accounts (IOLTA)
- International Fuel Tax Agreement (IFTA)
- Kilowatt Hour · Motor Vehicle Fuel (MVFT)
- Municipal Net Profits
- Municipal Tax Electric Light & Telephone
- Natural Gas Distribution (Mcf)
- Non-Resident Motor Vehicle Sales Tax
- Pass-Thru Entity Tax (PTE)
- Petroleum Activity (PAT)
- Premium Insurance Tax
- Public Utilities Tax
- Sales Tax
- Seller’s Use Tax
- Severance Tax
- Streamlined Sales Tax (SST)
- Withholding Tax
However, this will not be allowed in the use to pay private taxes by individuals. Regardless of the size of the business this facility will be available and the cryptocurrency will be changed to U.S. Dollars straight after payments.
Through the use of Bitcoin for payment of taxes there are hopes that Ohio will become a leader in the development and adoption of blockchain. Mandel said, “Secondly, to project to the rest of the country and the world that the state of Ohio is a leader in blockchain technology. I believe if we’re going to grow our technology economy here in Ohio, we have to first be a leader in technology.”
Though Mandel’s term ends in January he has already spoken to his elected predecessor Robert Sprague and said that they are friends and has full confidence it will continue afterwards as well. “We applaud the pilot that makes Ohio more business-friendly and sets us up as a leader in cryptocurrency. We will evaluate both currency and counter-party risk once we enter the office to see about the future,” Sprague said.
CEO of BitPay Stephan Paire said that this is a big step for businesses that are based on blockchain and cryptocurrency and a good choice of payment for them. “One of the things we do is talk to all the different companies in the blockchain and cryptocurrency industry and find out who their vendors are. We then talk to them and get them signed up with BitPay, and that enables companies in our industry to be able to pay their bills with the technology they’re building the infrastructure for.
Obviously, all these companies have to pay taxes, so it just makes a lot of sense for all those companies to have the ability to pay their taxes with cryptocurrency. With BitPay, Ohio can leverage blockchain technology and benefit from reduced risk and identity fraud as well as enabling quick and easy payments from any device anywhere in the world and get paid in dollars. This vision is at the forefront of moving blockchain payments into mainstream adoption.”
Though Bitcoin received a huge blow since the past week Stephan said the transactions of Bitcoin payment were growing. According to Stephen the transactions have tremendously grown from 5 to 6 transactions in a day to processing $1 billion in payments per year. “Generally speaking, volatility up or down stimulates spending. This year we’ve actually seen our volumes increase.”
The taxpayers do not need to worry about the dip since they are protected against market volatility. This is because BitPay presumes the risk according to a 15 minute allotted window from the time the payment is made at OhioCrypto
The process itself is quite simple. A business makes an account through Mandel’s OhioCrypto and fills in their tax payment information. It then gets passed and processed through BitPay. The bitcoin is then immediately converted into dollars which is then deposited into the state’s account. Mandel has already received a lot of positive feedback from business companies. Mandel felt that Bitcoin seemed like a good place to start, making Ohio the first state in America that is Bitcoin-friendly in taxes and there is hope this will spread all over the country. This is not only a new option but also a cheaper option for business owners. The fee is 1 percent of the transaction unlike the 2.5 percent if done using credit cards.
This is not the first time a government has tried to make ties with cryptocurrency. Seminole County in Florida has also talked about how they were planning to accept cryptocurrency payments. Proposals for the use of bitcoin in state governments had been filed in Arizona, Georgia and Illinois and though these efforts died or were resolved there is still hope.
At the moment OhioCrypto.com only accepts Bitcoin but there are plans of adding different cryptocurrencies in the future. This step is a great boost for crypto enthusiasts because it marks the change of the decentralized cryptocurrency being accepted by a government.