Cryptocurrency tax revenue negligible since launch of Colorado program
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In the more than two years that Colorado has accepted cryptocurrency as payment for state taxes, the amount it has received is negligible.
This story was originally published by the Colorado Newsline.
In the more than two years that Colorado has accepted cryptocurrency as payment for state taxes, the amount Coloradans have submitted using the new form of payment is essentially nonexistent.
The Colorado Department of Revenue in September 2022 started accepting cryptocurrency, such as Bitcoin, for all state taxes, including income tax, business income tax, sales and use taxes, and severance tax. The move was spearheaded with fanfare by Gov. Jared Polis.
State acceptance of digital currency is “important symbolically to show that we are a crypto-forward state,” Polis said when he announced the new feature, according to Westword.
In the four months that remained that year after the program went live, the state received eight cryptocurrency payments for a total of $16,426, according to state data obtained by Newsline.
In 2023, the state received 22 cryptocurrency payments for a total of $23,241, and in 2024 it received 48 payments for a total of $17,544.
The state typically takes in many billions of dollars a year in tax revenues. In fiscal year 2022-23, for example, it received $11 billion in individual income tax alone. The sum of all cryptocurrency the state received through the end of 2024 represents 0.006% of that figure.
“Colorado was the first state to innovate and accept cryptocurrency as payment for state taxes under the leadership of Governor Jared Polis,” Elizabeth Kosar, director of communications of the Colorado Department of Revenue, said in an email.
Kosar noted that Colorado doesn’t actually accept cryptocurrency. When taxpayers pay the state with cryptocurrency, they submit the payment through the PayPal Cryptocurrencies Hub, which converts the digital money to U.S. dollars before it’s sent to the state.
Cryptocurrency enthusiasts tout the digital asset as being supported by a decentralized system free of government regulation or manipulation. Critics note that crypto is often used to facilitate money laundering, illicit trade and corruption. It also contributes to environmental degradation, and it’s subject to price manipulation and wild volatility. Just over a month after Polis announced Colorado’s move to accept digital currency, the crypto market crashed and Bitcoin lost 70% of its value.
State taxes, as well as federal taxes, are due Tuesday.
Colorado Newsline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com.