Ohio senator re-introduces failed crypto tax plan
Ohio state senator Niraj Antani has proposed a bill that would allow residents and businesses to pay taxes using cryptocurrencies. Bitcoiners immediately rejoiced, reposting the news to thousands of likes and over 100,000 views.
While the proposal aims to position Ohio as a leader in crypto adoption, it faces significant skepticism regarding its viability. In short, the bill is exceedingly unlikely to become law.
The state legislator’s proposed law would compel the state and “all local political subdivisions” to accept bitcoin and other cryptocurrencies as a form of payment for state and local taxes. The bill would also allow state universities and pension funds to invest in crypto.
The bill’s chances of success are slim. Introducing legislation is a common way to express gratitude for donations, signal intention for general policy direction, or other intentions that are distinct from actually advancing the bill into law. Even in the most serious legislature in the country on Capitol Hill, less than 5% of bills ever become law.
Attempting to revive Ohio’s failed crypto tax law
Moreover, the state senator’s introduction is not Ohio’s first attempt to permit crypto-denominated taxes. In 2018, the state briefly claimed to accept bitcoin for tax payments through OhioCrypto.com. However, the Ohio State Board of Deposits never approved that program, and it was quickly suspended on advice of the Ohio Attorney General.
Now re-introduced thanks to senator Antani – if the legislature even agrees to consider the questionable proposal – the bill will face significant obstacles during its renewed legislative review.
Unlike the US dollar, which always pays a non-fluctuating value of USD-assessed taxes, cryptocurrencies are notoriously volatile. Volatility during tax form preparation and filing or even during the window of receipt could complicate tax collection and expose the state treasury to financial risks.
There are also significant regulatory hurdles, including opposition from the Ohio State Board of Deposits and the Ohio Attorney General based on a similar, failed initiative from 2018.
In addition, there are security risks regarding accepting non-USD payments, as a disturbing number of hacks and scams raise serious questions about the security of such a system for tax collection. Whether any particular cryptocurrency will hold its value even for a few minutes is a question of perennial debate.
So, while a state senator believes that ‘crypto is vital’ and sees his bill as a way to restore Ohio’s leadership in crypto, the proposal for crypto-denominated tax payment faces an uphill battle. The bill must navigate through the Ohio General Assembly and gain the governor’s signature. Along that circuit, it will likely face intense scrutiny and debate.
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