A program that allows businesses to pay taxes with cryptocurrency was not set up through the proper channels, Ohio Attorney General Dave Yost said in a formal opinion. Ohio Treasurer Robert Sprague suspended the program last month because of that concern.
The program, OhioCrypto.com, collects tax payments through cryptocurrencies and converts the money into U.S. dollars to be given to the Ohio Department of Treasury. The program is hardly used; fewer than 10 businesses paid taxes through the program in its 10 months of operation.
The program’s operations were contracted out to a third-party payment processor called BitPay. Because the program functions as a financial transaction device, Yost said that the R.C. 113.40 requires that the contract be selected through a competitive process by the Board of Deposit, which it was not.
“The Treasurer’s use of a payment processor to convert cryptocurrency into dollars for the payment of taxes is not authorized, expressly or implied, by statutes allowing the receipt of electronic payments,” the opinion read. “Nor is there any other statute that permits such conversions. Because of this, OhioCrypto.com, or a similar financial transaction device, must be authorized by the Board of Deposit pursuant to R.C. 113.40 before the Treasurer may use it to collect state taxes.”
The board can decide whether it wants to go through the proper channels to re-establish a similar program.