Colorado Governor Jared Polis announced on February 15th, 2022 that Colorado residents will soon be able to pay their taxes in Bitcoin and other cryptocurrencies as early as this summer.
Polis and other government officials in Colorado have been at the forefront of making their state more Bitcoin and cryptocurrency friendly for businesses and locals by first passing the Colorado Digital Token Act in 2019. The bill exempts tokens from broad securities laws and may be used for “consumptive purposes” like dining, groceries, or other purchases.
Polis commented that allowing residents to pay their taxes in Bitcoin and cryptocurrencies will be more seamless and cost effective than with dollars. Any Bitcoin or cryptocurrencies that are collected by the state would be instantly converted into dollars through an intermediary.
When asked about price volatility, Polis responded that it is not a concern because of the instant conversion process. All proceeds will be “converted at the moment it is paid just like with a credit card but with much lower transaction costs.”
“We expect by this summer to accept crypto for all of our state tax related purposes. And then we plan to roll that out across all of state government,” said Polis. He then went on to say that Bitcoin and cryptocurrency would also be accepted for things like drivers or hunting licenses within a few months after the summer.
The governor later mentioned that Senator Chris Hansen is developing a digital token bill “that will effectively allow state-created digital tokens to be utilized for state reserve purposes”. Issuing their own coin would not be a way to co-opt the technology at the expense of the people but as a way to create “new asset classes to satisfy reserve requirements”. Polis added that protecting residents’ privacy is a key role of governments.