In light of the weak market, US states are reconsidering crypto tax payments.
According to Bloomberg News on July 5, U.S. states are reconsidering accepting tax payments due to the bear market prices, with the exception of Colorado and Utah. Although Colorado and Utah didn’t flinch, they still need to work out administrative issues before introducing cryptocurrency tax payments. 37 states in all, including Georgia, Arizona, and Florida, have approved cryptocurrency tax payments, after Colorado and Utah. Lobbyists have also contributed, persuading politicians to discuss crypto tax payments. According to Samuel Armes, president of the Florida Blockchain Business Association, several jurisdictions are interested in permitting tax payments in cryptocurrencies.
After the market worth of cryptocurrencies plunged from $3 trillion to $900 billion in just six months, crypto sceptics are warning the states about the risks of crypto tax payments. The high market volatility over the preceding six months, in accordance with Lee Reiners, executive director of Duke University’s Global Financial Markets Center, significantly diminished cryptocurrency’s attractiveness. Apparently citing recent market volatility, California’s state controller Betty Yee referred to a crypto payment bill as “fiscally imprudent.” She claimed that because the sector is still growing and not ready for governmental inclusion, bitcoin volatility cannot be avoided. The proposition was opposed by Omri Marian, a professor at the University of California-Irvine School of Law.
Bloomberg claims that Utah and Colorado are the only states that are pushing forward with their plans to let individuals and businesses to pay their taxes using digital assets like Bitcoin, Ethereum, and Dogecoin. Other states, including New York, have not done this. Even better, Utah finalised the launch by adopting new law forcing local and state governments to accept cryptocurrencies as a form of tax payment. The updated rules will become operative on January 1, 2023. Crypto tax payments will be swiftly converted to dollars through a third-party payment method before being paid to the state. Colorado is currently ironing out the details, but despite the bad market price, it is not rescinding. The new law is likely to be published during the next legislative session.