Ohio is the first US state to allow taxes to be paid in Bitcoin, the Wall Street Journal reports. The aim is to send a signal of the state’s broader ambitions to remake itself and create a more tech-friendly image.
Companies are now able to pay taxes, starting from cigarettes to employee withholding taxes, all with bitcoin. The idea is to eventually extend the service to individuals as well.
In order to do so, businesses must first register with the Office of the Ohio Treasurer by using a dedicated web-portal called OhioCrypto.com. The second step involves filling the requested information concerning tax period, amount and other necessary information before proceeding to the final step – payment.
The cryptocurrency is transferred through the wallet, which must be compatible with the Bitcoin Payment Protocol. Popular wallets such as Bitcoin Core client, Mycelium and breadwallet are potential options to be used by Ohio businesses. The bitcoins are then exchanged to fiat currency (US dollars) by BitPay, a US-based bitcoin payment processor.
Columbus, the capital of Ohio, is already regarded as one of the potential major hubs developing in the US. Last year, the city of Columbus gathered an additional $277 million in local matching resources for its Smart Columbus program. Previously, the U.S. Department of Transportation crowned Columbus the winner of the Smart Cities challenges back in June. According to Dispatch, officials said they had gathered about $90 million, on top of the $50 million it would receive from the federal government and Vulcan Inc. In total, Columbus is investing $417 million in the Smart Columbus program.
Other countries in the US, such as Arizona, Georgia, and Illinois have also tried to set up a similar system for taxes, but they never got past the state legislature. All three states failed due to the lack of support and understanding for such a project.