Lawmakers in the Arizona State Senate are considering a bill aimed at having voters decide whether virtual currency is exempt from property taxation.
In legislation introduced to the first session of the Arizona State Senate in 2023, Senators Wendy Rogers, Sonny Borrelli, and Justine Wadsack proposed having Arizona residents decide on amending the state’s constitution in regards to property taxes. Should the measure pass the legislature, voters could choose whether virtual currency — specifically not “a representation of the United States dollar” — be tax exempt in the state in November 2024.
Under Arizona’s constitution, all federal, state, county and municipal property are tax exempt, as are public debts, many household goods, and certain “stocks of raw or finished materials, unassembled parts, works in process or finished products”. Data from the Arizona Secretary of State suggested that there were more than 4 million registered voters in the November 2022 general election, with the state leaning slightly Republican.
The bill, SCR 1007, went through two readings as part of the state senate’s calendar on Jan. 19 and Jan. 23. Lawmakers in previous sessions have attempted to move forward on legislation related to crypto and taxes, such as a 2018 bill allowing residents to submit tax payments in crypto, before then Governor Doug Ducey vetoed the bill. Rogers also introduced a bill similar to SCR 1007 in the second Senate session of 2022.
However, the proposed legislation would face a different political climate than that of 2018 or even 2022, with Rogers, Borrelli, and Wadsack — all Republicans — having either denied or questioned the fair and legitimate election of some state and federal lawmakers. Democrat Katie Hobbs narrowly defeated Republican Kari Lake to become the Governor of Arizona in the 2022 midterm elections.
Related: IRS to summon users who don’t report and pay tax on crypto transactions
At the federal level, sales or purchases of cryptocurrency are generally subject to capital gains taxes in the United States. Lawmakers in different U.S. states have proposed various policies related to crypto and taxes, including Colorado Governor Jared Polis allowing residents to pay taxes in crypto and Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming offering 0% capital tax gains to potential investors.
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Author: Turner Wright