Ohio is considering accepting cryptocurrency for state tax payments and fees, marking its second attempt at adopting digital currencies. Ohio State Senator Niraj Antani introduced a bill on September 30, 2024, to allow the state to accept cryptocurrency for various payments, including taxes and fees. The legislation also proposes allowing state institutions like higher education facilities and the state pension fund to invest in cryptocurrencies.
This bill represents a renewed effort for Ohio, which first attempted to accept cryptocurrency for tax payments in 2018. At that time, Ohio became the first U.S. state to allow businesses to pay taxes in Bitcoin. However, the initiative was short-lived, as the State Board of Deposits, which had to approve the use of cryptocurrency, did not show much interest, leading to the program's shutdown in 2019.
The new bill, introduced by Antani, gives the state tax commissioner the power to decide which cryptocurrencies will be accepted by June 30 each year. Additionally, the bill allows governmental entities to charge service fees for cryptocurrency transactions. Notably, central bank digital currencies (CBDCs) are excluded from this definition of cryptocurrency in the bill, meaning that only decentralized cryptocurrencies would be accepted.
The bill further defines "cryptocurrency" as a digital asset expected to maintain a stable value relative to a fixed amount of monetary value, limiting the type of cryptocurrencies that can be used. This definition ensures that volatile digital currencies are not used for state payments.
At the same time, Ohio's state legislature is considering other crypto-related regulations. One bill aims to prevent central bank digital currencies from being recognized as money under Ohio’s commercial code, while another seeks to protect the cryptocurrency mining industry within the state.
Senator Antani emphasized that the 2018 attempt to accept crypto for tax payments should have moved forward more enthusiastically. Since the State Board of Deposits did not act, the legislature is now stepping in to push the issue. Currently, Colorado is the only U.S. state that accepts cryptocurrency for tax payments, but Ohio could soon follow if this new legislation is approved.
