Ohio is the first state in the nation to allow businesses to pay taxes using cryptocurrency, according to a November 26 press release from Ohio Treasurer Josh Mandel.
The new initiative, championed by Mandel, went into effect this week and is intended to give business owners in Ohio more options when paying taxes and to "project Ohio's leadership in embracing blockchain technology."
Business owners in the state who are interested in paying their taxes with digital currency must first register their business on OhioCrypto.com and enter their tax payment information.
According to an FAQ page on the aforementioned website, any business operating in Ohio, even if it is not headquartered in Ohio, will be able to register and pay taxes with digital currency. The treasurer's office believes that by providing businesses this option, it will allow real-time tracking of secure tax payments, streamline the tax payment process, and give business owners options when paying taxes. For example, payments made in crypto can be sent using a smartphone or other mobile devices.
For now, 23 different taxes can be paid using virtual currency. Currently, bitcoin is the only type of crypto accepted, although the office is looking into accepting additional cryptocurrencies.
The new platform utilizes BitPay, which will immediately convert payments made in crypto to US dollars, and users are required to link a digital wallet that is compatible with BitPay.
The service isn't free. BitPay will charge users a network fee, a miner fee, and a transaction fee. The network fee constitutes the cost of validating the transaction on the blockchain, while the miner fee is set by BitPay. During a three-month introductory period, transaction fees will be zero percent. However, after the introductory phase, that fee will be one percent of the total transaction.
Mandel's term as state treasurer comes to an end in January. He'll be replaced by Robert Sprague, who has not yet decided whether he'll continue the policy.