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Ohio Senator Proposes Crypto Tax Payment Bill

The bill aims to boost crypto adoption in Ohio by allowing residents and businesses to pay taxes using digital assets.
By: Mehab Qureshi • October 01, 2024
ohio senate

Ohio State Senator Niraj Antani has introduced new legislation to establish Ohio as one of the few states in the U.S. to accept cryptocurrency for state and local tax payments.

Announced on Sept. 30, the proposed bill seeks to mandate that all government agencies in Ohio accept digital assets like Bitcoin for taxes, fees, fines, and other payments.

"Cryptocurrency is not just the future, but it's the present of our 21st-century economy. If we want to encourage innovation and free enterprise in Ohio, we should do everything we can to normalize these uses of cryptocurrencies,” said Antani. “By allowing Ohioans to pay their taxes and fees with cryptocurrency, we will be on the cutting edge.”

Under the proposed legislation, the state tax commissioner would select the cryptocurrencies eligible for use each year, with the list published by June 30.

However, the proposal notably excludes central bank digital currencies (CBDCs) with the specific phrasing that “‘cryptocurrency’ does not include a national currency.”

The Bill

If passed, the bill would allow residents and businesses to make tax payments using cryptocurrencies. It also permits state institutions, including universities and pension funds, to invest in cryptocurrencies. The legislation gives local governments the option to require payers to cover any service fees associated with cryptocurrency transactions, ensuring that the state's financial burden is minimized.

The Ohio tax commissioner would have to choose which cryptocurrencies are deemed acceptable. For instance, the proposal specifies that eligible cryptocurrencies must have “a reasonable expectation that it will maintain a stable value relative to a fixed amount of monetary value.”

For the bill to become law, it would need to pass through the Ohio General Assembly and gain the governor’s signature, a path that includes intense scrutiny.

Reviving an Old Attempt

This isn't Ohio’s first experiment with crypto tax payments.

In 2018, Ohio became the first state to allow businesses to pay taxes using Bitcoin, an initiative launched by then-state Treasurer Josh Mandel.

It allowed businesses to use Bitcoin to pay for 23 different types of taxes, including sales tax and employee withholding taxes, through a third-party payment processor called BitPay, which would convert the Bitcoin into U.S. dollars for the state.

However, the program faced regulatory issues that led to its downfall. In 2019, the Ohio State Board of Deposits, responsible for overseeing state funds, did not officially approve the use of Bitcoin for tax payments. This oversight was a crucial misstep, as the Ohio Attorney General later concluded that the program did not comply with existing laws regulating state financial transactions.

Antani’s proposal appears to be an attempt to revive Ohio’s leadership in crypto adoption. However, he appears to be aware of the challenges ahead, noting, “This policy should have been acted on by the State Board of Deposits when it was deemed necessary. Since they have failed to act, the legislature will.”

Ohio isn't alone in its attempt to integrate cryptocurrency into state financial systems.

In 2022, Colorado became the first state to accept cryptocurrency for tax payments, allowing residents to pay using digital currencies like Bitcoin and Ethereum through an online portal. However, payments are immediately converted into U.S. dollars by a third-party processor, shielding the state from crypto’s volatility.

Wyoming has been another trailblazer, passing a series of crypto-friendly laws over the past few years. It legally recognized cryptocurrencies as property and created a framework for decentralized autonomous organizations (DAOs) to register as legal entities. Wyoming's legislature has also paved the way for special-purpose depository institutions (SPDIs) that cater specifically to digital assets.

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