Bitcoin

First U.S State Accepting Bitcoin Tax Payments, Ohio is also the First State to Cancel it

The first U.S state to accept bitcoin for tax payments, Ohio is also the first one to withdraw its support and suspend the bitcoin tax-payment program. The treasurer of the state, Robert Sprague deactivated the program by suspending the website OhioCrypto.com that allowed businesses to pay tax while using bitcoin.

According to the treasurer, Ohio didn’t acquire approval from the Board of Deposit before launching the website. After realizing that the website was acting as ‘financial transaction device’, Sprague elaborated that BitPay acting as the service provider wasn’t justified and there should have been a ‘competitive selection process’ to finalize the provider.

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In simple words, Sprague meant that the selection of OhioCrypto.com was likely to be unlawful. He added that as exploring new technologies was essential, it was necessary that every decision taken was in accordance with Ohio law. In this regard, his words were:

It is vital that Ohio explores innovative, new technologies and processes that continue to drive Ohio into the future. However, we must make sure any new processes that are implemented, such as OhioCrypto.com, are established in accordance with Ohio law.

Ohio started accepting bitcoin tax payments last year. At that time, the treasurer Josh Mandel initialized the initiative and appointed BitPay to process payments. However, even back then, Mandel hoped for Ohio company to take over the processing.

Afterward, Sprague taking charge in February 2019 checked the program and found that BitPay’s appointment was not lawful. Therefore he felt that suspending the currency service provider was necessary in order to ensure that Ohio law wasn’t compromised under any circumstances. Therefore, fulfilling his responsibilities, Sprague suspended the website. He said:

As Ohio Treasurer, it’s my job to provide trusted stewardship and protection of Ohio’s tax dollars, and to follow the laws of this state. Until a formal opinion is issued by the Attorney General, I feel it is prudent to suspend the website.

Although the program has been suspended, it has left the service easing bitcoin enthusiasts and users in jeopardy. The treasurer hasn’t unveiled details for the future; no date or time of reestablishing the program was mentioned.

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Besides a shaky future, the past of the program doesn’t seem to be bright as well. As per the current treasurer, only 10 businesses availed the opportunity by paying taxes with the help of bitcoin. As the program was launched about a year ago, the aforementioned participation of businesses is very extremely small.

So, there is a possibility that the program might not open again as a small number of participants depict that allowing bitcoin for tax payments isn’t a large-scale important need for most businesses located in Ohio.

Ohio accepting bitcoin tax payments was a strong and prospective development. Previously, Anthony Pompliano, founder and partner at Morgan Creek Digital, shared his optimistic take on the development favoring mass adoption. In the past, he told BlockPublisher:

The crypto virus is spreading like wildfire as the the Ohio State has now announced to accept Bitcoin as a payment option for taxes.

Just a few months later after Ohio allowed users to use bitcoin for settling tax payments, Venezuela also jumped in just like Ohio. The country opened doors for crypto users to settle tax payments while using cryptocurrencies. At that time, the country clarified that people using foreign or cryptocurrencies are not required to pay tax with Bolivars. Instead, the same cryptocurrency or foreign currency was to be used by nationals to pay their taxes.

Ohio’s latest decision to revert back by canceling the use of bitcoin for tax payments shows that no development supporting mass adoption is absolute. Anytime, regulators can undo policies supporting and advocating bitcoin. In the future, it would be of interest to see if bitcoin can achieve permanent and immutable success.

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Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

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