Illinois Considering Cryptocurrency for Tax Payments

A very interesting article I came across by Stan Higgins of Coindesk.com claims that legislators in Illinois have proposed a bill to accept tax payments using cryptocurrency. The state won't hold onto the cryptocurrency, rather it will convert it into USD within a day. The original article can be found here.

Bill 5335 states: "Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that, in addition to any other method of payment provided for by law, the Department shall accept payment for any tax imposed by the State and administered by the Department by cryptocurrency. Provides that the Department shall convert such payments to United States dollars at the prevailing rate within 24 hours after receipt of the payment and shall credit the taxpayer's account with the converted dollar amount."

It will be interesting to see this develop and if it will pass in Illinois. Many bills come up for a vote and many never get passed. If this bill passes, it shows how cryptocurrency adoption is becoming more widespread and trusted. It can be a huge step for blockchain technology.

One issue I see with this bill is due to the volatility of cryptocurrencies. Cryptocurrency can fluctuate significantly in 24 hours. If the government takes 24 hours to convert the crypto into USD the amount paid by the taxpayer can vary.  If the tax payer is trying to pay a specific amount, it can not be done so reliably using crypto. This can be avoided if the government credits the taxpayer the amount the crypto was worth at the time the taxpayer sent it. That way, the taxpayer would know exactly how much they would be paying rather than hoping the market doesn't crash in 24 hours.  

The original bill can be found here.


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