A Bill was passed on February 8th
by the Arizona Senate that would allow its residents to pay their income tax
using Bitcoin and any other cryptocurrencies that have been recognised by the state’s revenue authorities, although this would not come into effect until 2020.
This is the first bill that actually signifies the widespread adoption of virtual currencies in the US. Although, in the past, it has been heavily argued that the true value of Bitcoin
is incredibly difficult to determine because it has no backing or guaranteed use from the government, the proposed bill would change this, giving recognised cryptocurrencies real world functions and values. Jeff Weninger, a co-sponsor of the bill told Fox News;
It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for blockchain and digital currency technology in the future.”
Despite the good intentions of this bill, there are some grey areas, and it is not going to be a guaranteed success. One such area is what happens when there is a huge amount of volatility between someone paying their income tax, and the time that the revenue department converts these into the approved cryptocurrency. The Bill states;
“The Department shall convert cryptocurrency payments to United States dollars at the prevailing rate within twenty-four hours after receipt and shall credit the taxpayer’s account with the converted dollar amount.”
This would imply that should the value drop between the time that it has been paid and is converted, the resident would have to pay the remaining balance; yet, there is nothing stated regarding what would happen if this was the other way around.
Time will tell with regards to how successful this new Bill would be. On the one hand it would be a fantastic start to making Bitcoin and other cryptocurrencies more mainstream
, but it would appear that there a few creases that need ironing out for this to be completely successful.
Original Image Source: Wikipedia