Ohio to Become the First U.S. State to Allow Taxes to Be Paid in Bitcoin

Discussion in 'HardForum Tech News' started by cageymaru, Nov 26, 2018.

  1. cageymaru

    cageymaru [H]ard as it Gets

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    Ohio has become the first state to accept Bitcoin as a valid payment method for paying taxes. Starting this week, companies can register to make various types of tax payments in Bitcoin. Individuals will be allowed to make tax payments in Bitcoin at a later date.

    Ohio has also been working to bring other aspects of blockchain technology into law. Over the summer, the state legally recognized data stored and transacted on a blockchain, meaning electronic signatures secured through blockchain technology have the same legal standing as any other electronic signatures. In the same month, Ohio lawmakers also pitched their state as a future hub for blockchain, hoping to both attract companies in the space and blockchain talent to the jurisdiction.
     
  2. Verge

    Verge [H]ardness Supreme

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    Well played Ohio, right as soon as nobody cares about crypto anymore :)
     
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  3. Darunion

    Darunion 2[H]4U

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    We are a little slow over here.

    I wonder what the states plan is. Hoping to accumulate a bunch and it gains value?
     
  4. Bowman15

    Bowman15 [H]ard|Gawd

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    Pay and watch them drop in price the next day losing untold tax money for the state...Yeah that seems like a good idea. I didn't know they were into open upfront gambling?
     
    Last edited: Nov 26, 2018
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  5. niconx

    niconx 2[H]4U

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    They'll change that when they find out fast Bitcoin is crashing.
     
  6. exiled350

    exiled350 [H]ard|Gawd

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    So do I get a nastygram delivered by an agent of the state if my btc payment is worth less than my tax liability by the time they receive it?
     
  7. nutzo

    nutzo [H]ardness Supreme

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    Out here in California I can pay my property taxes with a credit card, but they charge a 2.5% fee.
    Most likely the state will partner with a private company, and that private company will assume the risk and charge a convenience fee to accept Bitcoin.
    State will get the full amount, even if Bitcoin drops after your payment.
    I can see some fine print that if Bitcoin drops too much, they will reject your payment, and you will have to resubmit it the next day.
     
  8. haste.

    haste. [H]ard|Gawd

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    They charge a fee on credit and debit due to interchange fees to offset their charges for accepting the payment form. Bitcoin is a volatile imaginary "currency" that fluctuates greatly so they are in fact gambling as another poster stated. Much much much different.
     
  9. Paladin21

    Paladin21 Gawd

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    Can I get them to accept Beanie Babies or Pogs?
     
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  10. McCartney

    McCartney Gawd

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    what he's saying is that the private company will be a guarantor.

    if you pay your taxes in btc, the exchange in USD on that day will be "backed" by a private company, who may then lose their shirt by doing so.

    however the idea is intriguing.

    "as long as you get paid [in your desired currency (my addition lol)]"
    as they say.

    maybe the private sector can stabilise btc if they're able to score situations like this.
     
  11. kju1

    kju1 2[H]4U

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    In other news Ohio files for statewide bankruptcy due to weak passwords on their wallets...

    Oh and the fact that bitcoin crashed again.
     
  12. whatevs

    whatevs Limp Gawd

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    In a few years we'll read that this was done solely for the benefit of a single business entity or rich person or two to get rid of their crypto currency stash and pay off their obligations at same time.

    Wonder what makes Ohio so nice to retire to for a drug dealer or random cyber criminal.
     
  13. Nukester

    Nukester [H]ard|Gawd

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    Great way to find out who hasn't paid taxes on their bitcoins. Pay with bitcoins, and expect an audit :)
     
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  14. Bowman15

    Bowman15 [H]ard|Gawd

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    That sounds even worse. The state's Bitcoin tax dollars being backed up by one private company....that doesn't seem stabilizing at all.

    This wreaks of some state committee OK'ing something without all the technical details and fallout.
     
  15. dandirk

    dandirk [H]ard|Gawd

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    They will use an exchange service just like most others that accept BTC.

    It will be converted to USD within minutes of receipt. The service company will set the value and accept the risk.
     
  16. dandirk

    dandirk [H]ard|Gawd

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    I would say the same thing about complaining about something.

    Credit card companies literally are the same thing. A retailer accepts payment by VISA because funds are backed by a private company.

    Is the risk greater with BTC for sure... and without knowing who or the specifics its hard to tell if this would be good idea or not. One would assume the state would do some due diligence and require insurance amounts based on account balances. Though maybe they don't and yes that would be bad but we don't know.
     
  17. Bowman15

    Bowman15 [H]ard|Gawd

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    You are talking about major worldwide credit card companies with multiple decades of sound business strategy , which they themselves are insured as well. Credit cards are not a fluctuating "magic money' in their own so I don't see the connection? Now you add extra fees just for the conversion. To say there is a greater risk is a complete understatement. They are dabbling in something that is not stable at all in hopes of some future gains. gambling with tax payers money is not a good thing in my book.
     
  18. dandirk

    dandirk [H]ard|Gawd

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    The connection is that both processes are nearly the same for the retailer. They use an intermediary service to accept X type forms of payment which then gets converted to $ and paid to the retailer, in this case Ohio.

    There is NOTHING in the links posted (specifically ohios direct link) that suggest they are "in hopes of some future gains". As a matter of fact they are using Bitpay which has been servicing bitcoin->$ payments for 7 years. The article even says "All tax payments will be processed by Atlanta-based bitcoin payments processor BitPay, which will convert bitcoins to dollars for the Treasurer’s office."

    The risk is certainly greater but I would not say a "understatement" since as you brought up Visa/MC is much larger and in service longer. Yet risk is still limited to Bitpays insurance and resource management practices in conjunction with payout schedule which is daily, hey who would have thought google has usful info. I would assume they are well aware of how volatile bitcoin is and has some sort of risk management. Therefor risk for the state is exactly 1 day of payments.

    Not sure how a fee is a factor, credit cards also have a fee and it wasn't long ago government agencies charged extra fees for using credit. For sure if the fee is abnormally large etc, but we don't have info on that and is not really much a factor is the discussion we are having.
     
  19. Bowman15

    Bowman15 [H]ard|Gawd

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    One day of payments can be huge in bitcoin fluctuation, that was my main point. Hech it can be a matter of a few hours. Credit cards are not volatile like that as they are NOT pretending to be a fiat currency. They don't charge fees for the most part anymore. Everything is a factor in this discussion if it costs tax payers more than it does any other fees.You sound pretty sure for not having all the answers either? To me this seems like a waste of tax payer resources that could have been better spent elsewhere.
     
  20. dandirk

    dandirk [H]ard|Gawd

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    You made no such point, other than "wreaks of..." and "...hope of gain" etc The later which was completely wrong, and indicates you didn't even read the article(s).

    I never disagreed that this was inherently riskier than CC, the amount of added risk is essentially the discussion which you have not added anything other than "more than CC" and "magic money" statements.

    The risk of a day is a worst case scenario, in the event the company (bitpay) goes completely under. I would agree this could be very large but is also the worst case scenario (depending on how they manage accounts/escrow may not even be at risk) . Otherwise when someone pays with bitocin, bitpay API will give them the current exchange rate and the transaction will be on record for that amount. If price plummets in an hour, later transactions will reflect that. I couldn't quickly confirm on that but I would be very surprised if they performed currency exchanges later in the day when $ funds would be transferred. If this is the case I would certainly agree the risk is much much higher.

    So your argument isn't that "This wreaks of some state committee OK'ing something without all the technical details and fallout." but risk and cost is greater than CC and a poor use of taxpayer funds? I would say that those are good arguments if you actually made them and gave any info/assumption supporting.

    As for CC not having fees for the most part? From what I can gather CC still charge 2-3% and Bitpay charges 1% so it is possible CC payment processing is wasting tax payer funding (I wouldn't but it's a possible argument).

    I sound pretty sure because I look up the info and clearly state my assumptions and lack of info where my opinion would change. Like if Ohio was taking payments (from bitpay) in bitcoin instead of $ I would completely agree with you as being a horrible decision. But the article stated they are converting to $.

    There certainly is a valid question on whether adding bitcoin processing is worth the resources spent and additional risk (how great or little that might be) but we have virtual no information to make on that since we don't know what was driving the change. Requests to the state by businesses or some "future looking" added service offering.
     
  21. Bowman15

    Bowman15 [H]ard|Gawd

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    Sounds like you are guessing and stating opinions just like I am...and you'd be wrong about those current cc fees. Feel free to look it up in Google.
     
  22. McCartney

    McCartney Gawd

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    i understand your frustration, but another way to look at this is that it is an experiment.

    if the private sector incurs too much of a loss by insuring the currency at a given price point (some form of "contract" [i'm not a finance guy so i can't get too precise]), then the experiment must be stopped due to its impact on the locality/globality (presumably some form of currency inflation due to the insolvent debt from losses [if that's how it 'crashes']).

    if they're asking me to pay them in e-gold or bitcoin, i'm typically paying cash to get in. bitcoin moves towards legitimacy if these private sector guys can pull this off.

    i didn't even know e-gold went defunct. i liked the idea. anyways i am not too well-read on crypto currencies so please try to abstract this as much as possible.

    i look at this as an experiment. isn't bitcoin nearly 'capped' in terms of how much more currency can be 'mined'? so the pool is quite well-defined, and paying taxes with it may be some good timing.

    i thought this was a stupid idea originally, but at this point it's going to be the private sector who gambles and ultimately i think the government will have more control in terms of the negative consequences (this should sort of be obvious).
     
  23. haste.

    haste. [H]ard|Gawd

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    I understand the second half of his statement but it's completely ludicrous to think a private company is willing to take that risk unless they are immediately buying the currency and selling it on the open market. Comparing it to interchange fees is silly tho.
     
  24. illram

    illram [H]ard|Gawd

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    Ha. This was my first thought as well.
     
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  25. McCartney

    McCartney Gawd

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    i too have questions about how the btc will be buffered, but that's not my problem.

    i'm just grateful i'm not in ohio right now lol
     
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  26. Paul_Johnson

    Paul_Johnson [H] Admin Staff Member

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    Winner winner chicken dinner
     
  27. Patton187

    Patton187 Gawd

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    This is brilliant and should have 20+ likes.
     
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