According to Fast Company, Iowa has begun accepting some tax payments via Dwolla. The cigarette stamp tax, which generates around $100 million for Iowa, will be the first tax that Iowans will be able to pay via Dwolla. However the Governor, Terry Brandstand, says he’d consider expanding Dwolla payments to other fees and taxes in the future as well.
“Iowa is accepting some tax payments using startup money transfer platform Dwolla, Governor Terry Branstad announced today. The option will first be available for businesses paying the cigarette stamp tax, which accounts for about $100 million of Iowa’s revenue each year. But Gov. Branstad said the state would consider expanding it to other fees and taxes.”
“‘This is just the first,’ he told Fast Company.”
“Because [Dwolla] cuts out middlemen such as credit card companies, it is able to charge a favorable rate. Transactions less than $10 are free, and transactions for any greater amount cost $.25.”
“This consistent and relatively low transaction rate makes Dwolla particularly attractive to businesses and now–it hopes–governments that regularly transfer large amounts of money. Only about 11% of transactions made on the platform are between individuals.”
“A government embrace of Dwolla could save users money. As one policy advisor to Gov. Branstad put it, “there is no line item for paying Visa in the budget,” and payment processing fees generally get passed on to citizens in the same way businesses pass them onto customers. A lower payment processing fee could mean a lower amount due.”
Read the Fast Company post here.