Around this time of the year, many tax deadlines for many states and countries around the world seem to be fast approaching. Because this is going on in many places, people are naturally thinking about tax and whether cryptocurrency has any effects on the calculation and collection of tax. In some places, cryptocurrency investments became taxable as far back as January 2018. However, it would seem like some of the effects of cryptocurrency on tax might specifically affect cannabis.
Cryptocurrency And Cannabis Tax
About ten of the United States have now legalized recreational marijuana while the number for medical marijuana is around 33. However, even in some of these states where cannabis is legal, many financial institutions have still refused to do any transactions with cannabis businesses because it is still regarded as a drug. This attitude towards businesses who deal with cannabis has caused quite a few problems for them when they do need to pay tax.
In California for example, these businesses have to employ the use of armored vehicles to transfer cannabis and cash to state councils because banks have refused to do the transactions for them. This problem seems like a quite a show stopper but cryptocurrency could really save the day.
Cryptocurrency Bill For Cannabis Businesses
Phil Ting, a member of the California State Assembly, has pushed forward a bill which would enable the state’s cannabis industry remit taxes to both the county and city governments using cryptocurrencies. This would make the process of tax payment very stress-free, secure and more accountable since the banking institutions have refused to help.
According to Ting:
“You have stores with cash and then you have at times warehouses with cash and the amount of cash they have is just very difficult to secure. It’s dangerous enough transferring out product around. It makes it doubly dangerous transferring all the cash around.”
He also went ahead to say that:
“A small cannabis store just like a small storefront. They’re in a residential neighbourhood. There are people who live there who are all around. If something happened that was potentially violent or dangerous, there could be repercussions for that neighbourhood.”
Even though the bill has not yet seen approval, it is speculated that using cryptocurrency to pay tax bills could happen by next year.
How This Could Help Cryptocurrency Adoption
This development could benefit the cryptocurrency industry very heavily. This is because the industry would probably have to invest considerably in cryptocurrency if that’s how they will be paying their taxes. If this happens, it could encourage widespread adoption of cryptocurrency among different companies across different sectors, whether currency or not.