US: the Georgia state senate introduced a bill to allow tax payments in cryptocurrencies.
The US state of Georgia is the next state in line to possibly accept cryptocurrencies as a valid form of payment for state taxes and licenses, according to a bill introduced on Feb. 21.
Senate Bill 464, introduced by Republican state senators, Joshua McKoon and Michael Williams, proposes that “[t]he commissioner shall accept as valid payment for taxes and license fees any cryptocurrency, including but not limited to Bitcoin, that uses an electronic peer-to-peer system.” The bill stipulates that once payments are received, the commissioner will convert the cryptocurrency to US dollars within a period no longer than 24 hours.
This new legislation comes on the heels of very similar measures undertaken Arizona’s state senate in bill passed earlier this month, allowing that, “[a]taxpayer may pay their income tax liability using a payment gateway, such as Bitcoin, Litecoin, or any other cryptocurrency recognized by the department, using electronic peer-to-peer systems.” The Arizona bill also stipulates that crypto will be converted to US dollars within 24 hours.
Having already passed its third reading by a narrow margin, Arizona may be one of the first US states to accept cryptocurrencies for tax payments.
Wyoming also recently introduced legislation that would exempt cryptocurrencies from being taxed as property, which has been crypto’s federal classification since 2014. A group of mostly republicans introduced bill SF0111, which proposes a list of “intangible items”, among which are cryptocurrencies, gold, and cashier’s checks, which would be exempt from property taxes.
While initially the news may seem like a boon for crypto users, tax law expert Robert Wood wrote in an expert take for Cointelegraph that using cryptocurrencies to pay taxes could actually lead to paying more taxes, since gains in cryptocurrencies used for tax payments could themselves be subject to capital gains tax and investment income tax.
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Author: Aaron Wood