Catch up on stories from the past week (and beyond) at the Slashdot story archive

 


Forgot your password?
Close
typodupeerror
×
Bitcoin Government The Almighty Buck United States Technology

Arizona Introduces Bill That Would Allow Residents To Pay Taxes In Bitcoin (investopedia.com) 109

Posted by BeauHD from the first-of-its-kind dept.
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.
This discussion has been archived. No new comments can be posted.

Arizona Introduces Bill That Would Allow Residents To Pay Taxes In Bitcoin More

Arizona Introduces Bill That Would Allow Residents To Pay Taxes In Bitcoin

Comments Filter:

  • Good idea (Score:3, Funny)

    by 110010001000 ( 697113 ) on Thursday February 08, 2018 @08:02PM (#56092691) Homepage Journal
    This is a good idea. I have a significant investment in Bitcoin and this would be a good use for it. I expect massive returns this year on it.

    • Wait a minute... I want to tack on a rider to that bill -

      https://www.youtube.com/watch?v=lKPZDq9IQIU

      • identity (Score:3, Insightful)

        by Anonymous Coward
        Thanks for paying your tax bill using bitcoin, and giving us your bitcoin wallet address which we have now linked to your identity.

    • Re:Good idea (Score:5, Insightful)

      by rmdingler ( 1955220 ) on Thursday February 08, 2018 @08:39PM (#56092827) Journal
      Suspect once you actually pay your taxes with Bitcoin, the State will want you to do some splainin' about your Bitcoin purchase price.

      Investment income, or some such shite.

      • Re:Good idea (Score:4, Interesting)

        by Actually, I do RTFA ( 1058596 ) on Thursday February 08, 2018 @09:47PM (#56093079)

        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.

        • Re: (Score:2)

          by Bert64 ( 520050 )

          Well that assumes that you actually made a profit, you could easily have made a loss by trading bitcoin too.
          There is also a threshold for personal sales as far as i understood, if you buy a car and sell it again later you don't have to declare the sale unless you're doing it as a business.

          Besides, it's no different than any other form of trading. You buy an asset, its value goes up or down, you sell that asset.

          • Of course it's no difference from any other trading. But anarcholibertarians (who believe in bitcoin) think they don't ever owe taxes and other people think they don't need to pay taxes cause it happened on the Internet.

        • There are no money laundering violations for deliberately making each sale under $10k

          • Re:Good idea (Score:4, Informative)

            by Actually, I do RTFA ( 1058596 ) on Friday February 09, 2018 @01:34AM (#56093725)

            No, but there are laws against arranging transfers into a bank deliberately under $10k. (Or rather, arranging multiple transfers of money into a bank that total $10k for the purpose of hiding the fact that it's a 10k transfer.) It's called structuring. That's cause 10k deposits trigger reporting rules to the IRS that you look like you're trying to avoid.

            • Re: (Score:2)

              by WallyL ( 4154209 )

              So, doing legal things, transferring money in small amounts, can get you in trouble? No wonder people hate banks, the financial system, and the government. Maybe it's time to reboot this government... ~300 years is a good historical average lifespan of a democracy (pure, or democratic republic, or otherwise).

              • No, it's legal to do legal things. It is illegal to break up a transfer of 10k+ into multiple smaller transfers to avoid scrutiny. If that happens, you'll have to explain why you had a different reason for what you are doing.

                It's perfectly reasonable that different circumstances cause different legality.

          • No, but you can rest assured that there will be an investigation whether that was the reason for you to do multiple transactions under 10k, making the whole 10k limit a total farce.

    • And just when you thought the Diamondbacks were the worst run organization in Arizona.

  • A blockchain and cryptocurrencies tech hub ? (Score:3)

    by perpenso ( 1613749 ) on Thursday February 08, 2018 @08:14PM (#56092727)
    So how does converting a US dollar tax bill amount to bitcoin in real time and providing a payment address, monitoring that payment address for confirmation, and then immediately converting those bitcoins to US dollars make a region a blockchain and cryptocurrencies tech hub? Especially when much of the preceding will likely be outsourced to an existing bitcoin payment processor.

    • But, but... BLOCKCHAIN!! ...er, or was that AI?

      Democracy is slow...

    • Re: (Score:1)

      by Anonymous Coward

      The book Debt: The First 5000 Years [wikipedia.org] argues at one point that allowing taxes to be payed with a currency is what legitimizes a currency. For example, with early fiat currencies, requiring that taxes be payed in that currency means that each random member of the population now needs to acquire at least enough of it to pay said taxes.

      For example, a government could pay its soldiers with a currency, and then require taxes to be payed in that currency, thereby causing the general population to accept payment in

    • Re: (Score:1)

      by Anonymous Coward

      and if the ``state'' really does accept bitcoins, then how would you deduct those from your federal taxes?

      • The state is unlikely to come out and say "You owe us 0.3865 bitcoin for your state taxes." They're much more likely to say "You owe us $X in state taxes, and we'll accept cash, check, credit card, bank transfer, or Bitcoin." That $X is what you deduct on your Federal taxes. (If you still do. I understand the last tax cut made a whole lot of changes.)

    • Re: (Score:2)

      by mjwx ( 966435 )

      So how does converting a US dollar tax bill amount to bitcoin in real time

      The tax department will simply use their own rate which chances are, will be the day rate from their chosen source + x%.

      The infrastructure is already there, banks have been giving people spot rates + x% on their credit cards for overseas purchases for decades now.

      It would likely be cheaper for you to turn your bitcoins into USD via your broker and pay with that, but saying "OMG, you can pay with bitcoin.. much progression, very future" makes for nice headlines.

  • Never going to happen.
    I wouldn't be surprised if it's illegal.

    • Re: (Score:2)

      by TWX ( 665546 )

      My guess is that this is even less of a starter than the Whiskey Rebellion.

      I did a cursory search on if the Federal Government accepts gold as currency for tax purposes and did not get any hits that said either way, but there were a lot of hits on the debate if the transaction or appreciation of gold is taxable in the same way that things like stocks are. This makes me lean towards thinking they don't accept gold as payment.

      I'm going to further guess that they're not willing to accept non-US-currency or at

      • Your tax bill is a thousand DOLLARS. Not a thousand MasterCards, a thousand pesos, or a thousand BTC.

        There are many payment processors you can use to pay various taxes. Those payment processors can accept MasterCard as a *means* of transferring dollars, they can accept PayPal, they can accept watermelons if they want to, or gold, gasoline, or BTC. What they deliver to the government is dollars.

        There is such a thing as gold currency, gold dollars, produced 200 years ago, but the gold is made of is worth fa

        • There are gold dollars made today in the US, no need to go back in time 200 years

          • There are gold dollars made today in the US, no need to go back in time 200 years

            They're beautiful, but who is going to pay anything with them? This one [usmint.gov] costs $215 to buy from the mint. Face value: $10.

            If you want to pay me in those coins, I'd love it.

    • While a creditor is _required_ to accept _legal tender_.
      He is free to accept any other payment to settle the bill.

      • While a creditor is _required_ to accept _legal tender_

        No they're not. Plenty of places no longer accept cash. Well before that, many more places didn't accept bills at or above a certain denomination, $100 bills.

        • Re: Publicity stunt (Score:1)

          by Anonymous Coward

          Wrong.
          Cash HAS to be accepted for repayment of a debt, but you can choose to accept otjer means of payment.

          Most purchases you make are paid in advance so thus there's no debt.

        • Then you don't buy there and they are not your creditor.
          Or in other words: they have to point out that they don't accept cash before serving you.

          Refusing big bills is in most cases illegal, it is only 'acceptable' at places where there is a good reason, e.g. on flea market or to bus driver etc.

          YMMV, depending on country.

          • ... they have to point out that they don't accept cash before serving you.

            I never wrote anything to the contrary.

            Refusing big bills is in most cases illegal...

            See my other reply here [slashdot.org].

        • Are you talking about places where a sale occurs, or where a debt is incurred? If you owe someone $100, a $100 bill is legally payment. If you're making a deal to buy something, then you can do it on any mutually acceptable terms, and includes payment type. If your shoe store doesn't accept cash, that's legal. You're not creating a debt. If you go to a restaurant and order a meal and the bill comes later, that's a debt.

          • Section 31 U.S.C. 5103:

            United States coins and currency ... are legal tender for all debts, public charges, taxes, and dues.

            This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services.

            Further translation: all the statute says is that US currency is one (of

            • It doesn't say anything particularly about a debt incurred for a good or service It does say it's legal tender for a debt. It says people don't have to accept cash as payment for goods and services, but they do for payment of a debt. If my local grocery store decides to stop accepting cash, it's their decision (and probably a bad one), since there's never any debt. I get a cart of stuff, pay for it, and then it's mine. I think you're reading more into the text than is actually there.

              • Cite a federal law that supports your claim. Unless you can, itâ(TM)s sinply not true.

                • Considering your .sig, it seems ironic to me that you're reading meanings into a Federal law that I don't see. You seem to assume that the law applies to payments after the good or service, which it doesn't explicitly say.

      • A creditor in the US is required to accept US Dollars only if prior to incurring the debt you have not been informed that US Dollars will not be accepted to settle the debt OR you are dealing with a public (i.e. government) service. It is for example absolutely legal to refuse service to you if you are not willing to pay me in Zimbabwe Dollars, thus no debt is generated and nothing to be settled.

        I may also assume that you're able to read, so putting up a sign in my shop informing you about this is sufficien

    • Re: (Score:2)

      by AHuxley ( 892839 )
      Re "I wouldn't be surprised if it's illegal."
      Person pays in bitcoin. The payment is cleared to US cash by some approved 3rd party payment system.
      The government gets a cash US payment as it would from any other private sector CC, bank account, payment network.
      At no time did the state government see the risk of any cryptocurrency.
      The gov is paid in US cash on time and to the value of that account.
      That approved payment network will then have to show its currency transaction reporting, suspicious acti

    • "Arizona Governor Signs Blockchain Bill Into Law" https://www.coindesk.com/arizo... [coindesk.com]

      Do some basic research before spewing nonsense.

  • I thought it said introduced by "Jeff Winger", so it seemed sort of OK for an episode of "Community". You know how it goes, Greendale starts accepting bitcoin, but it gets bankrupt because bitcoin is worthless 2 weeks after the students make the payments when the transactions (or most of them) actually get through, but then something involving either time travel, or multiverse paradoxes, or claymation happens and the day is saved...

  • Really? (Score:4, Interesting)

    by glitch! ( 57276 ) on Thursday February 08, 2018 @08:24PM (#56092767)

    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.

  • Stupid (Score:1)

    by Anonymous Coward

    How about a bill letting me pay in Euros, Pounds, Yen, Renminbi, or any other real currencies before letting people pay with BubbleBucks? Assuming that paying in anything other than USD is even federally legal, which it shouldn't be.

    • Residents won't get a tax bill for 1.02 BTC.
      They'll get a bill for a thousand DOLLARS, and they can pay that thousand DOLLARS using a check, Visa, MasterCard, But pay, PayPal ...

      • When you pay with Visa, Mastercard, Amex, Paypal, cheque, etc, you pay in real dollars.
        Not sure what But pay is.

        You can't "pay" for something in BTC, it's not a currency it's a commodity. It would be like paying your taxes with gold or corn.

        • Darn autocorrect turned Bitpay into "But pay".

          Bitpay is a payment processor, just like any of the thousand payment processors on the web. Their shtick is that they let people use Bitcoin to pay. Web sites say "we accept Bitcoin" and the order form links to Bitpay. Of course, the prices are in dollars, not in BTC. Customers are using BTC as a method of paying the dollar price.

          • Re: (Score:2)

            by Bert64 ( 520050 )

            You can pay a dollar price with a card denominated in another currency, the card issuer will exchange whatever currency you hold into whatever the recipient wants at the time of processing (while also usually adding a fee for the service)...

            Does that make euros any less of a currency?

            • "Currency" comes from currens, present participle of currere. It means "what flows". Same as "current", as in "the current of the river". Currency is the thing that flows through the economy, that everybody uses to buy and sell pretty much everything. Euros are the currency of the EU. South is the current of the Mississippi River.

        • If your government accepts corn, why not pay in corn? It's unwieldy, I grant you that, and transporting it and storing it, along with weighing it so I know whether you pay the right amount and assessing its quality so I can assess its value correctly, that all might be a bit of a hassle, but if I need corn, why shouldn't I allow you to pay in corn?

    • Assuming that paying in anything other than USD is even federally legal, which it shouldn't be.

      If I can instantly convert whatever you pay with to USD, why should it not be legal? Of course you will also pay for any fees arising from converting whatever rubbish you throw at me to USD.

  • Encouraging blockchain or distributed ledger tech businesses to locate in Arizona probably has something to do with Arizona's interest in making use of it's abundant solar energy resources. For worldwide enterprises, we need to have mining and testbed facilities in the States that can compete with countries with lower or subsidized electricity rates.
    • Doubt it... This wouldn't necessarily encourage such business to make capital investments in the state - power plant construction contractors don't accept cryptocurrencies, for one, nor do I see them any time soon. And if your claim is that the politician who introduced this legislation has the foresight to realize cryptocurrency mining operations will need to be colocated with solar energy in the future, the burden of proof would be on you to show a quote from him demonstrating such. Then demonstrating how
  • Comment removed based on user account deletion
  • But $6000 worth of Bitcoin, pay when it's worth $10k and leave the State and the rest of the taxpayers holding the bag when they drop to $3k.

    • Re:Oh for fucks sake no (Score:4, Insightful)

      by AHuxley ( 892839 ) on Thursday February 08, 2018 @10:02PM (#56093125) Journal
      The state gov will accept the payment in US cash. The crypto currency needed to make that payment will have to go to an approved 3rd party to make the conversion.
      That "$10k" will be cash when the state accepts the payment. The user paid in crypto currency that was converted by a approved 3rd party as part of the transaction.
      The state will never be out as they have cash just like from any other payment.
      No risk for the state who is still paid in full with US currency and the state gets the optics of "accepting" crypto currency.
      Think of it as the state accepting a CC payment from a private sector bank, from a building society, using "internet" banking.
      The state gets its payment, the user used a CC. Money moved from an approved account to pay the state.
      If that account is now called "crypto currency" from what was "credit card"? The state still gets its cash as the transfer.

    • That's unlikely to happen. What I'd rather expect is that the government would make you pay as many BTC as the current exchange rate says your debt is in BTC, then immediately turn around and sell those BTCs to someone to get USD.

      It's a publicity stunt, nothing else. I highly doubt that any government entity has interest in holding BTCs.

      • It screams publicity stunt because the state already has the means to force you to pay in USD for the full amount of your taxes. Anyone who does this is almost certainly going to be paying more because the state is going to force the risk of the volatility on the exchanges and that means increased fees for whoever is paying through them.

      • I don't see any other way Arizona could do it, Constitutionally. No state can make legal tender out of anything except silver or gold.

  • They out-floridaed Florida!

  • How about allowing residents to avoid capital gains on anything they sell to pay their taxes? Of course if the law were worded that way, they'd still have to declare capital gains on their Federal tax return.

    If you're allowed to pay state taxes in something other than USD, and that something has an unrealized capital gain then the state is effectively allowing you to dodge Federal capital gains... or is it?

    I see this being an administrative nightmare and/or going to court, possibly the Supreme Court becaus

    • You realize the capital gains right at the moment of paying tax, and you better have it declared because they have undeniable proof of you realizing your capital gains...

    • Suppose my tax bill arrives, and I'm in a personal liquidity crunch, so I sell some stock to pay it. I owe capital gains on that stock. Similarly, if you bought Bitcoin at $400 each and am paying the state while they're worth $8K each, you will owe capital gains.

  • I wonder if Jeff Weninger happens to own any bitcoins...

  • This is government practicing speculation. Why not just buy stocks using taxpayer money?
  • says they want to know whom to audit ... assuming crypto still holds any value in the next few years.

    • and they want to be able to tie a wallet address to a specific individual. They can then go and look back through the blockchain to map transactions between people.

      • Re: (Score:2)

        by AHuxley ( 892839 )
        Re 'they want to be able to tie a wallet address to a specific individual."
        A state digital "Crack tax" https://en.wikipedia.org/wiki/... [wikipedia.org]
        Have to prove to the state all the crypto value, history of transactions and then to allow be tracked for all later crypto payments.

  • So you then have to pay for two $10 transactions, one to transfer the bitcoin to the state, one for the state to exchange for USD.

    I'm not in USA but I can and do pay my taxes with my phone. I could do it from my couch as I'm watching TV. I simply use my banks mobile app to make a tax payment. No transaction fees, instant payment confirmation, easy to use.

    Paying taxes with bitcoin is as stupid as paying taxes with shares. Even stupider actually. The sharemarket is much less volatile than bitcoin.

  • Weninger, a Republican, also cited the ease of making online payments through the cryptocurrency "while you're watching television," ...

    Um... You can pay by more conventional means like online banking via your phone or PC or any other means (electronic or otherwise) your state accepts while watching TV too. You could even write a check during a commercial. Not really sure how Bitcoin is any easier.


  • Paying taxes with bitcoin currently is just daft.

    Firstly you are declaring outright that you have traded BTC and will have to pay tax.

    Secondly you will be losing money to convert to BTC then have the state lose more of your tax money by converting back.

    Simply put BTC is currently too slow. If the value changes in transit and appreciates will you be refunded? If it goes down will the state HODL??

    Imagine a scenario in which the state has most of its payments in BTC and it needs to pay employees, contr

    • You left out "Thirdly, you are telling the state that you personally control a certain wallet, so they can associate all your transactions with you."

  • Oh sorry you underpaid your taxes (Score:1)

    by Anonymous Coward

    That $2500 tax bill you paid with bitcoin yesterday was only worth $200 at the time of processing please send a check for the difference.

  • I was all for cryptocurrency, but this shit is getting out of hand. Can we just stop with it already? Now that it's mainstream, it serves no purpose.
  • Bitcoin is NOT legal tender in the USA. While it can be traded, but it's tantamount to paying your taxes in chickens and/ or lawn care. BC is way too volatile and possibly headed to valueless.

Slashdot Top Deals

Whatever is not nailed down is mine. Whatever I can pry up is not nailed down. -- Collis P. Huntingdon, railroad tycoon

Close