Giant online retailer Overstock—a long-time crypto enthusiast--is ringing in the New Year with another first: It will pay business taxes in Bitcoin to the State of Ohio, the first state to adopt the practice of collecting taxes in digital currency.
Using the state’s OhioCrypto program, Overstock will be paying its Commercial Activity Tax (CAT) to Ohio in Bitcoin. It’s a tax that applies to businesses with over $150,000 in receipts.
The advantage to paying taxes in Bitcoin as opposed to using a credit card is rather large if you’re a business: It’s the difference between 2.5 percent and 0-1 percent, depending on when you file. Early birds, like Overstock, can pay with zero fees.
This makes Overstock the first nation-wide company to pay state business taxes with Bitcoin, Forbes reported. And it makes Ohio the first state to offer the service, which it initially unveiled in the fall of 2018.
Ohio is gunning for legacy here as the leader in blockchain technology adoption and “silicon valley” of crypto. The initial rollout of OhioCrypto will allow businesses to pay 23 types of taxes collected by the state, and expects to expand the service to more business taxes and to individuals.
To collect taxes in crypto, Ohio is using BitPay, which then remits the payments to the state in dollars.
“Our biggest motive here was to give taxpayers more options in paying their taxes,” Ohio State Treasurer Josh Mandel told Bitcoin Magazine. “Secondly, we wanted to project to the rest of the country that Ohio is embracing technology and is a place that is welcoming software developers and entrepreneurs who want to build a blockchain business here in the State of Ohio. By launching Ohiocrypto.com, we are planting the flag here in the state, and showing that we are a leader.” Related: How Big Data And A.I. Are Transforming The Energy Industry
And then we have Overstock--an early adopter of bitcoin for its customers that added other cryptocurrencies in 2017.
“We have long thought that thoughtful governmental adoption of emerging technologies such as cryptocurrencies (when accompanied by non-restrictive legislation over these technologies) is the best way to ensure the U.S. does not lose our place at the forefront of the ever-advancing global economy,” Overstock CEO and founder Patrick M. Byrne said in a statement.
In fact, Byrne is exiting the retail business to focus exclusively on blockchain—a revolution he says “has a greater potential than anything we’ve seen in history”.
“It’s bigger than the internet revolution, how it’s going to restructure society,” he told Fox Business.
For crypto bulls, the fact that Ohio is collecting taxes in crypto and a huge retailer like Overstock playing along is proof that bitcoin at least is actual currency.
Once you can pay taxes with it, it is undeniably a currency—even if not fully matured--as opposed to a security or an investment asset class. It’s an important distinction, and it could change things going forward—particularly if other states jump on this bandwagon.
At most, it could end the debate as to whether bitcoin is a real currency or not. At least, it could be a major step towards bitcoin’s ascendancy into a full-blown currency.
But far beyond Ohio and state business taxes, MIT Technology Review says that blockchain will become so commonplace this year that it will become “boring”.
“In 2017, blockchain technology was a revolution that was supposed to disrupt the global financial system. In 2018, it was a disappointment. In 2019, it will start to become mundane.”
By Michael Kern for Safehaven.com
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