Using Crypto to Pay State Taxes Emerging as Next Frontier

U.S. states and cities are betting on a future where government agencies collect taxes and fees in digital currencies such as Bitcoin, Ethereum and Litecoin.

Colorado Gov. Jared Polis (D) set the pace this week, telling CoinDesk: “We will be accepting crypto for paying state taxes and other transactions with the state by the end of summer.”

Polis isn’t alone in his ambitions: Bills in six other states reflect efforts to establish ground rules for passing crypto-denominated sales and income taxes to revenue agencies.

“State tax authorities want revenue any way they can get it—and if this is ...