Since the Colorado government is unable to accept cryptocurrency on its own, the Revenue Department has partnered with PayPal, which is tasked with mediating each asset exchange and automatically converting the virtual token into USD.

The first state tax payment plan in partnership with PayPal now allows residents of Colorado to pay their taxes in cryptocurrencies like Bitcoin and Ether, according to the state’s department of revenue.

Under Colorado’s primary tax law, which includes individual income tax, company income tax, sales and use tax, etc., people and businesses will be able to trade in bitcoin assets to pay tax charges. Cash, check, money order, credit or debit card, and E-check are some more tax payment options.

Since the Colorado government is unable to accept cryptocurrency on its own, the Revenue Department has partnered with PayPal, which is tasked with mediating each asset exchange and automatically converting the virtual token into USD. Given that the payment processor will also charge a fee for each transaction, it follows that the payment will be more expensive than usual. Tax payments were initially restricted to Bitcoin exclusively.

Governor Jared Polis announced plans to use bitcoin for tax payments by the end of July in February of this year. With this payment option, residents of Colorado can use cryptocurrency to pay severance taxes, withholding taxes, and other taxes.

In addition to the 83c/o fee on the payment amount, PayPal charges $1. While Colorado launched its cryptocurrency initiative on September 1 with a preliminary launch, Florida and Ohio have looked into using cryptocurrency to pay taxes.

Utah is the only other state that has continued with the purchase of digital tokens for the settlement of tax debts. When Attorney General Dave Yost authorized a statement alleging that the state treasurer was never given the proper authority to operate the program, Ohio, which had a program back in 2018, was forced to immediately disband it.

This action is thought to have a favorable effect on the spread of cryptocurrency adoption among a large audience.