Paying Taxes in Bitcoin: Retailer Overstock Says It Will Pay Ohio Using Digital Money
Once upon a time, people used livestock or bushels of wheat to pay their taxes. Today, we use checks, credit cards, online money and—starting this year in Ohio—Bitcoin.
On Thursday, the online retailer Overstock announced it would pay a part of its Ohio state business tax using the famous digital currency. The move comes after the state last fall unveiled a first-of-its-kind payment portal called OhioCrypto, which lets companies remit taxes using cryptocurrency.
In an interview with Fortune, Ohio Treasurer Josh Mandel said the Bitcoin tax collection program is aimed at providing convenience to businesses, and branding the state as a leader in the adoption of blockchain technology.
Mandel added that many taxpayers opt to use credit cards, which obliges them to pay a 2.5% service fee, but that Bitcoin payments will incur a fee of only 1%—and none at all for early filers like Overstock.
For now, the Ohio Bitcoin initiative covers only 23 types of business taxes the state collects, including those for tobacco and fuel. And in the case of Overstock, it is electing to pay only the Commercial Activity Tax (CAT), which applies to businesses with over $150,000 in receipts.
In 2020, Mandel says, Ohio may also expand the program to other types of taxes and to individual tax filers. He added that he expects OhioCrypto will also offer the option to pay using a range of cryptocurrencies other than Bitcoin.
In terms of collecting the Bitcoin, Ohio is for now not using its own cryptocurrency wallet, but is instead relying on Atlanta-based service provider, BitPay, which will receive the Bitcoin payments and then remit them to the state in U.S. dollars.
Mandel says an Ohio auto dealer was the first business to pay in Bitcoin, but that Overstock is the first company with a national presence that has announced it will do so.
“We have long thought that thoughtful governmental adoption of emerging technologies such as cryptocurrencies (when accompanied by non-restrictive legislation over these technologies) is the best way to ensure the U.S. does not lose our place at the forefront of the ever-advancing global economy,” said Overstock CEO and founder Patrick M. Byrne in a statement.
Byrne is a vocal cryptocurrency enthusiast, and Overstock has long offered customers the option to pay in Bitcoin. In 2017, the company also made it possible to pay in dozens of other types of digital currencies.
While the number of businesses paying Ohio in Bitcoin is likely to be modest at first, Mandel says he believes the program will grow in coming years, and expand to other states. He added that he hopes the U.S. Treasury will follow Ohio’s example and allow people to pay federal taxes with cryptocurrency.
An earlier version of this story incorrectly stated the Ohio tax collection was limited to CAT taxes.