Arizona is also vying for the potential offered by cryptocurrencies, specifically with a bill in which it will become the first state that allows for people to pay their taxes in cryptocurrencies. The bill, which recently advanced, will allow taxpayers to pay taxes with Bitcoin, Ethereum, Litecoin and other cryptocurrencies.
This could position Arizona as one of the leaders in the cryptocurrency market and will also assist in drawing cryptocurrency companies to the state. Wyoming’s proposal would extend crypto payments to sales and use taxes, according to Politico.
As the article notes, Wyoming and Arizona are making strides just as the popularity of bitcoin gains traction.
The growing acceptance of crypto means that many states are beginning to take notice and realising that they need to create ways to tax them.
Other jurisdictions have also explored crypto-friendly policies, including in Ohio, Florida, Colorado, and Tennessee, according to the article.
While some critics believe the acceptance of crypto for taxes could erode supremacy of the greenback, crypto enthusiasts are seeing these developments as gains in their dream of crypto legitimacy and widespread acceptance, according to Politico.
These actions will come with their own set of complications, including legal and political hurdles. Still, that some state governments are forging the way to adoption/acceptance, is perceived as a big win in the crypto world.
“Wyoming has gone further than any other state in passing laws to accommodate cryptocurrency adoption, and backers of the proposal there believe it will be the first state to take a significant step in the realm of tax payments,” according to the article.
The effort in Wyoming is also offering an important perspective: The forces jockeying to shape the Wyoming effort also offer a window into some of the forces vying to shape the coming years of digital money. Thus far, Politico pointed out major players include big retailers and commercial banking industry veterans.
Those backers include American CryptoFed, whose founders formerly worked on mobile banking platforms, and who have a project to issue a “so-called algorithmic stablecoin — a cryptocurrency whose value is pegged to the consumer price index — that can be collected for sales tax purposes.” The goal of American CryptoFed is to one day compete with the Federal Reserve System.
Retailers who are part of the Merchant Advisory Group, backing the proposal include Home Depot, Walmart and Amazon, according to Politico reporting. Wyoming Rep. Ocean Andrew, who sponsored the amendment, said that the appeal for retailers would be convenience and would allow for crypto tax payments to be automatic through digital smart contracts.
For retailers, part of the appeal would be convenience, said Wyoming Rep. Ocean Andrew, the sponsor of the amendment, which would allow crypto tax payments to be made automatically via digital smart contracts and reduce the paperwork burden.
Though the earliest moves for crypto adoption for tax payments will likely be cumbersome, the trailblazing efforts should make adoption easier for other states in the future.