Arizona Introduces Bill That Would Allow Residents To Pay Taxes In Bitcoin (investopedia.com)

In a bid to attract businesses involved in blockchain and cryptocurrencies, Arizona lawmakers have proposed a bill that would allow the state's citizens to pay their taxes in bitcoin. "Arizona State Rep. Jeff Weninger, who introduced the bill, said it was a signal to everyone in the United States, and possibly throughout the world, that Arizona was going to be the place to be for blockchain and digital currency technology in the future," reports Investopedia. From the report: Weninger, a Republican, also cited the ease of making online payments through the cryptocurrency "while you're watching television," as another reason. But he did not divulge much detail about the implementation of such a system. That might be the reason why Weninger faces an uphill battle in getting the bill approved by the state legislature. Bitcoin's price volatility is already being cited as a possible roadblock to implementing such a measure by state legislators. Arizona state senator Steve Farley, a Democrat who's running for governor, said the bill puts the "volatility burden" of bitcoin's price on taxpayers who make payments in U.S. dollars. "It would mean that the money goes to the state and then the state has to take responsibility of how to exchange it," Farley said.

Comments

Really?

[glitch!]

First, the state will probably have to process the payments through an exchange to avoid the Btc / Dollar bounces. That's not a huge problem, but one analogous to accepting payments in gold or silver.

The second issue I see is that payers will have their payment wallet instantly connected to their real identity. Payers who are careful about security can probably avoid this, but how many will think their previous Btc transactions will be anonymous after they willingly give the state a connection by an accidental security lapse?

I am no Btc expert, so please flay my point if need be.

Re:Good idea

[Actually, I do RTFA]

You're definitely supposed to pay taxes on your bitcoin profits. It's not even close to a question. I'll be amazed if the IRS doesn't start calling on people who cashed in bitcoin and didn't report it. Plus,the fines and interest.

And, if you timed your sales so that each one is below the 10k reporting level, you might get a fun visit from the FBI for money laundering.