Ohio to accept bitcoin for business tax payments
Ohio will become the first state to accept tax payments made using bitcoin, the state’s treasurer, Josh Mandel, said Monday. Mandel’s office announced the creation of OhioCrypto.com, an online portal through which businesses can pay their state taxes using the cryptocurrency.
“We’re doing this to provide Ohioans more options and ease in paying their taxes and also to project Ohio’s leadership in embracing blockchain technology,” Mandel said in a press release, referring to the distributed ledger technology that powers bitcoin and other digital currencies.
Businesses interested in paying their taxes in bitcoin can do so after registering with the new website and signing up with BitPay, an online payment processor that specializes in cryptocurrency transactions. The company interacts with users’ “wallets,” virtual accounts that hold bitcoin sums, and converts payments to government-backed currencies like U.S. dollars.
BitPay’s chief executive, Stephen Pair, said in the state’s press release that the company’s platform offers a secure mode of paying taxes online. “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,” he said.
Mandel’s office said all bitcoin tax payments will be converted to dollars before they reach the state, and that the Ohio government will never directly hold bitcoins in its accounts, nor will it engage in operations to obtain more of the currency, which is “mined” by computers solving complex math problems. The state will accept bitcoin payments for 23 types of business taxes, including sales, withholding, public utilities and motor-vehicle sales.
There are no current plans to extend the bitcoin payment system to individual taxpayers.
BitPay will charge businesses who elect to pay their taxes through bitcoin several fees, including a “networking fee” to cover the cost of validating payments on the blockchain network, as well as an unspecified “miner fee” collected by the bitcoin developers who mine new coins. The company will also collect processing fees equal to 1 percent of a tax payment, though that fee will be waived for the first three months of the program. The state’s standard business tax-payment portal charges credit-card users a 2.5 percent processing fee by comparison, according to Mandel’s office.
Mandel, who is leaving office at the end of the year, has discussed the bitcoin tax payment plan with his successor, Robert Sprague, who was elected state treasurer Nov. 6, the Cincinnati Enquirer reported.