Lawmakers in the Arizona State Senate are considering a bill to let voters decide whether virtual currencies are exempt from property taxes.
In legislation introduced during the first session of the Arizona State Senate in 2023, Senators Wendy Rogers, Sonny Borrelli and Justine Wadsack proposed that Arizona residents decide on amendments to the state’s constitution regarding property taxes. Should the measure pass the legislature, voters could choose whether virtual currencies — specifically not “a representation of the U.S. dollar” — would be tax-exempt in the state by November 2024.
Under the Arizona Constitution, all federal, state, provincial, and municipal property is exempt from taxation, as are government debts, many household goods, and certain “stocks of raw or finished materials, unassembled parts, work in progress, or finished products.” Arizona Secretary of State data suggested there were more than 4 million registered voters in the November 2022 general election, with the state slightly Republican-leaning.
The bill, SCR 1007, has undergone two readings as part of the Senate calendar on January 19 and January 23. Lawmakers have tried to push forward legislation related to crypto and taxes in previous sessions, such as a 2018 bill that would allow residents to file tax payments in crypto before 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 — denying or questioning the fair and legitimate election of some state and federal lawmakers . Democrat Katie Hobbs narrowly defeated Republican Kari Lake to become Arizona’s governor in the 2022 midterm elections.
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At the federal level, the sale or purchase of cryptocurrency in the United States is generally subject to capital gains tax. Lawmakers in several 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% tax returns to potential investors.