You can now pay your Ohio taxes with bitcoin
Update 10.8.2019: Ohio Treasurer Robert Sprague has suspended OhioCrypto.com, the state's portal for accepting cryptocurrency tax payments.
The first hot dog in the United States was served in Ohio in 1900, and the nation’s first traffic light stopped cars in Cleveland in 1914. Another notable Ohio first is happening right now: Ohio taxes can be paid with cryptocurrency.
According to the Treasurer of Ohio, “Ohio has become the first state in the United States, and one of the first governments in the world, to accept cryptocurrency.” The process is simple and open to all businesses operating in the state, though taxpayers must have a 9-digit Ohio Tax Account in order to make payments.
Why pay with cryptocurrency?
Ohio Treasurer Josh Mandel wants Ohio to become “a national leader in blockchain technology.” According to his office, benefits of paying with cryptocurrency inlcude:
- Quick and easy remittance
- Real-time tracking
- Secure payments
- Low fees
- Mobile options
Twenty-three Ohio taxes can currently be paid with cryptocurrency, including cigarette and tobacco taxes, consumer’s use tax, sales tax, seller’s use tax, and withholding tax. Bitcoin is the only form of cryptocurrency currently accepted, though more options are expected to be available in the future.
How it works
- Register online at OhioCrypto.com
- Enter tax payment information (business tax payment amount and tax period)
- Pay with cryptocurrency (bitcoin)
Payments are processed through BitPay, a third-party cryptocurrency payment processor. The Ohio Treasurer emphasizes that it will hold no cryptocurrency: “Payments made on OhioCrypto.com … are immediately converted to USD before being deposited into a state account.”
Since the value of bitcoin and other cryptocurrencies is volatile, BitPay allows a 15-minute window for each transaction. The exchange rate is set at the start of the transaction, and “BitPay assumes the risk of any market fluctuations during the allotted time window.”
Ten wallets are compatible with OhioCrypto.com:
- BitPay Wallet
- Copay Wallet
- BTC.com Wallet
- Mycelium Wallet
- Edge Wallet (Formerly Airbitz)
- Electrum Wallet
- Bitcoin Core Wallet
- Bitcoin Wallet
- BRD Wallet (breadwallet)
- Bitcoin Cash (BCH) Wallets
There are three ways to make a payment. Details are available on OhioCrypto.com.
Three fees apply to Ohio cryptocurrency payments: a miner fee, network fee, and transaction or processing fee:
- The miner fee is charged by BitPay. As the Ohio Treasurer “has no insight or control over the ‘Miner Fee,’” it isn’t listed on OhioCrypto.com.
- The network fee is a separate charge to validate the transaction on the blockchain network.
- A special 0 percent introductory transaction fee is being offered for the first three months, after which it will jump to 1 percent.
The Treasurer notes that the charge for credit card payments is 2.5 percent of the transaction amount. There are no fees associated with ACH credit and debit payments made through the Treasurer’s office.
Welcome to Blockland
Cleveland is working to rebrand itself as Blockland, a city “open for blockchain business. The Blockland Initiative “seeks to establish Cleveland as a significantly relevant technology center by being a leader in blockchain solutions, with the goal of massively growing employment that benefits the entire Cleveland community.” It seems the Treasurer of Ohio is on board.
Several other states, including Arizona, Georgia, and New Hampshire, have explored but abandoned the possibility of paying taxes with virtual currency. All eyes will be on Ohio in the months and years to come. If other states do follow Ohio’s lead, you can read about it at the Avalara blog.
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