New legislation has been introduced by lawmakers in the U.S.
New legislation has been introduced by lawmakers in the U.S. state of California, that would allow cannabis-related businesses to pay fees and taxes in stablecoins.
Introduced on Feb. 21, in the California State Assembly, bill 953 makes provisions for cannabis related companies to pay their taxes in stablecoins – which have their value pegged on some physical asset with a fixed value.
The county tax offices in California have been instructed to accept stablecoins from these companies. Cannabis related companies usually have to pay something called a cultivation tax, which they can now choose to pay in crypto. The bill also states:
“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.”
This decision comes at a time when the assembly feels that cash deposits are a hassle for such companies. The bill lists out the problems that some of these companies faced while paying their taxes at the county office.
Fiona Ma, the California State Treasurer had recently testified before the U.S. House Committee on Financial Services. Addressing the problem of cash payments she said:
“Duffel bags and sometimes suitcases of cash would arrive quarterly at some of our designated offices and some business owners had to drive 350 miles to pay their taxes.”
Cannabis businesses have been thriving in many U.S. states, since they have been legalized in those respective states. However, they still face difficulties in coordinating with banks and securing any credit.
The aim of this bill is to cut down on the amount of cash that flows in and out of this industry. A lot of cash ends up in state tax offices and then they have to be processed. With this new bill, the people are embracing a new system of payment.