Altcoin News: Tax on the Sale of Marijuana in California Can Be Paid in Cryptocurrencies

March 1, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

Lawmakers in the US state of California submitted a bill proposing to allow companies producing and selling marijuana to pay taxes using stable coins.

The bill number 953 will allow the tax authorities of the state, cities, and districts to take stable coins from companies producing and selling marijuana, to pay excise taxes and taxes on the cultivation of cannabis. The law will come into force on January 1, 2020.

“The bill would authorize that city or county in determining that method to either accept stablecoins directly into a digital wallet controlled by that jurisdiction or to utilize a third-party digital asset payment processor that allows for the immediate conversion of any payments made by stablecoins into United States dollars and deposit into an account of that jurisdiction,” the bill says.

Recall that marijuana was legalized not so long ago in several US states, but companies associated with this business encounter difficulty in obtaining financial services from banks. The fact is that most banks operate under the regulation of the Federal Deposit Insurance Corporation (FDIC), which prohibits financial institutions from dealing with such companies.

Manufacturers and sellers of marijuana constantly accumulate huge amounts of cash, and taxes are often paid in cash. Tax services have to deal with a large amount of cash, and company representatives sometimes need to travel up to 500 kilometers to the tax service office. Thanks to the use of stable coins, the collection and processing of taxes will become easier for the tax service and for companies.

Note that the pioneer in collecting taxes using cryptocurrency has become the US state of Ohio. At the end of November, state profit organizations were able to pay their taxes using cryptocurrency. Following them, the authorities of the state of New Hampshire thought about this possibility.

Author: Marko Vidrih