AEI: The implications of accepting cryptocurrency for tax payments
By Shane Tews
Last year, Ohio made news by becoming the first and only state to accept cryptocurrency (bitcoin) for state business tax payments. I recently had the opportunity to discuss this move with the Chris Berry, the Chief of Staff to the former Ohio’s state treasurer, Josh Mandel, who implemented this plan. Berry worked with his state government colleagues who want Ohio to become the national leader in blockchain technology. Berry believes the state’s move to allow businesses to pay their taxes in bitcoin on OhioCrypto.com will encourage more blockchain-related companies to do business in Ohio, and increase “options and ease” for taxpayers. Here are some of the highlights from our conversation.
SHANE TEWS: How does this new program that allows businesses to pay their taxes in cryptocurrency work?
CHRIS BERRY: The business entity must operate in the state of Ohio and pay Ohio state taxes. We currently allow state tax payments for 23 business taxes in Bitcoin, [including] sales tax, withholding tax, pass-through entity tax, public utilities tax. Companies register and pay via OhioCrypto.com, a payment portal that immediately converts payments in bitcoin to US dollars. The exchange rate will be set for a 15 minute window for each transaction once the taxpayer begins the payment process. The bitcoin is converted into USD by our third party payment provider, BitPay. The State Treasury receives the total amount in USD.
TEWS: Is there a preferred payment platform that you are working with to process these payments?
BERRY: Currently Bitcoin is the only accepted cryptocurrency, but there are plans to expand the program to individuals and additional cryptocurrencies in the future as participation in the program grows and we learn more about the processing part of this currency.