PHOENIX—Arizona residents may soon be able to pay their state taxes using Bitcoin and other cryptocurrencies.
Arizona state bill 1091, sponsored by Republican state Senator Warren Petersen and co-sponsored by three other GOP legislators, would allow Arizona residents to pay their state income taxes using cryptocurrencies, reported Strategic Coin.
The text of the bill states that in addition to physical checks the State of Arizona will accept income tax payments made through a “payment gateway, such as Bitcoin or other cryptocurrency, using electronic peer-to-peer systems,” Strategic Coin reported.
“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,” the bill adds.
“This could prove to be frustrating for taxpayers if cryptocurrencies retain their present volatility, as individuals would likely have to overpay their bills by 10% or 20% in case the price drops before the department converts the payment into USD. Twenty-four hours is a long time for the cryptocurrency markets,” stated Strategic Coin.
“However, the department could mitigate this problem by contracting with a third-party cryptocurrency payment processor, such as Coinbase or BitPay, both of which convert cryptocurrency payments to fiat currency at the point of sale for a minor fee, usually 1% according to their websites. Credit card processors, in contrast, often charge as much as 3% to process card payments,” noted Strategic Coin.