Colorado taxpayers can now use cryptocurrency as a form of payment when filing their state taxes, Gov. Jared Polis announced Monday.
Polis first said in March that he intended the state to be able to accept cryptocurrency by the end of this summer. With the announcement Monday, Colorado became the first state to accept crypto for tax payments.
“As of right now, the state of Colorado is officially accepting cryptocurrencies as a payment option for all taxes,” Polis said. “We’ve been talking about this for awhile, and we said we would deliver by the end of the summer — we have.”
Cryptocurrencies, such as Bitcoin, are digital currencies, and their transactions are verified and recorded on a blockchain. A blockchain is a decentralized, unalterable ledger that tracks assets.
The move to accept cryptocurrencies applies to all state taxes, including individual and business income taxes, sales and use taxes, severance taxes, withholding taxes, excise taxes and fuel taxes. The state will take the digital payments and deposit the equivalent value in dollars into the state treasury, Polis said.
“Taxpayers can now select cryptocurrency as a payment option, just showing again from a customer-service perspective how Colorado is tech-forward in meeting the ever-changing needs of businesses and residents,” he said.
Polis made the announcement Monday afternoon at the headquarters of the Downtown Denver Partnership, where he was speaking at the kickoff to Denver Startup Week. Denver Startup Week is a free, weeklong gathering of entrepreneurs that includes dozens of sessions, competitions and other events aimed at developing Denver’s startup community.
Colorado’s move to accept cryptocurrency as an accepted payment option is an example of the state fostering “bold ideas,” Polis said.
“As a state, we’re on the forefront of digital innovation, whether it’s applying blockchain and shared-ledger technology as a new model for funding, or whether it’s simply being consumer-friendly and making sure that we allow for the kind of innovation that will disrupt legacy business practices and government practices to make them more efficient,” he said.
Polis has said repeatedly that he wants the state to become a national hub for blockchain innovation. In 2019, he created the new government role of blockchain solution architect and named Thaddeus Batt, a Denver resident who operated his own blockchain consulting firm, to the job.
In an interview with Wired in February, Polis said the state government eventually would accept cryptocurrency for hunting and fishing licenses and driver’s licenses.
The cryptocurrency market has taken a plunge this year — a downturn that industry insiders are referring to as a “crypto winter.” According to NASDAQ, crypto fell lower Monday than it’s been in the past several months. Bitcoin fell about 5% on Monday to a three-month low of $18,387, Reuters reported.
While planning Denver Startup Week, organizers anticipated planning sessions about the blockchain and cryptocurrency. While the topic will still be part of the agenda, the idea “lost a little bit of steam” with the market downturn, said Ben Deda, an organizing chair of Denver Startup Week and the CEO of FoodMaven.
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