Bitcoin Payments for Taxes: The Beginning of a Trend?Adam Gardiner
In an exciting development for Bitcoin, Seminole County, Florida will soon begin accepting Bitcoin and Bitcoin Cash as payment. The two cryptocurrencies will be able to be used to pay for driver’s licenses and ID cards, automobile license plates and titles, and property taxes. The county has partnered with BitPay as its payment processor, marking BitPay’s first partnership with a government entity.
Acceptance by government has always been the key for the adoption of any currency, as the ability to pay taxes in a currency will spur widespread adoption. That was going to be the key for Bitcoin’s ultimate success too. While IRS won’t accept Bitcoin in payment of federal taxes, it may be that action at the state and local levels will be what spurs the eventual adoption of Bitcoin by governments around the country and eventually the federal government.
The legislatures in both Arizona and Georgia this year took up legislation that sought to accept Bitcoin as a payment for taxes, although those tax payment provisions failed to make it into law. Governments are probably still worried that by accepting Bitcoin they may be on the hook for potential losses due to swings in Bitcoin’s price. But that’s where companies like BitPay come in, immediately exchanging those bitcoins for dollars so that companies and governments who accept cryptocurrency payments don’t expose themselves to any price volatility.
If Seminole County’s experiment with accepting Bitcoin and Bitcoin Cash is successful, it could spur other localities to start accepting Bitcoin. And that could spur state governments to start accepting Bitcoin as a payment for fees and taxes too.
Bitcoin’s establishment as a payment method will help stimulate demand for Bitcoin, which will benefit Bitcoin IRA investors, as that will boost Bitcoin’s price. The more entities that accept Bitcoin, the more people will purchase and hold Bitcoin, and that bodes well for Bitcoin’s future.