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Tax Planning

Bitcoin Tax Payments Allowed in Ohio

Businesses can use bitcoin to pay 23 separate taxes in the state.

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The Buckeye State just became the first state in the nation to accept bitcoin for tax payments.

Right now, only businesses can use the cryptocurrency for Ohio tax payments. But look for the state to expand the program to personal tax payments in the future. Cryptocurrencies other than bitcoin could be added to the payment program as well.

SEE ALSO: 10 Cryptocurrency Alternatives to Bitcoin

Businesses can use bitcoin to pay 23 separate Ohio taxes, including sales tax, the Commercial Activity Tax, withholding taxes and tobacco taxes. They don’t need to be headquartered in the state to use the blockchain technology, but they must operate in Ohio and have a tax profile on file with the state treasurer’s office.

Payments must be made through a special payment portal at OhioCrypto.com. The state itself does not hold cryptocurrency. Instead, payments go through a third-party processor (BitPay) that converts the bitcoin payment to U.S. dollars and deposits it into a state account. BitPay sets the exchange rate for each transaction. It also assumes the risk of any market fluctuations while the transaction is being processed.

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Fees apply to each transaction. A processing fee is based on a percentage of the total transaction amount. A network fee is also charged to cover the costs of validating the transaction on the blockchain network. A “miner fee” may also apply.

SEE ALSO: 20 Most-Overlooked Tax Breaks and Deductions