New Bill Looks to Establish Tax-Exempt Status for Crypto in Arizona

With the U.S. government still failing to make significant progress on crypto regulations, several states have decided to take matters into their own hands. In Arizona, a new bill seeks to determine the tax status of digital assets.

Getting the Government Out of Digital Wallets

In this year’s first season of the Arizona State Senate, a bill was introduced to determine whether virtual currencies should be exempted from property taxes. The legislation was introduced by Sens. Wendy Rogers (R), Sonny Borrelli (R), and Justine Wadsack, and it proposes opening the discussion to residents in the state. 

The bill, which is titled SCR 1007, already went through two readings as part of the Arizona Senate calendar. Both hearings were held on January 19 and 23, and the bill’s sponsor will now be gearing up to present it to the broader chamber in the near future. 

According to the bill’s text, it is looking to amend Arizona’s constitution viz a viz property taxes. The state’s constitution clearly states that all federal, state and municipal properties should be tax-exempt. These include public debt, different household goods, and specific “stocks of raw or finished materials” such as machine parts and more. 

Each of the Senators is looking to get it past the state legislature, ensuring that voters choose in November 2024 whether they’d like to make digital assets exempt from these taxes. Arizona is currently home to over 4 million registered voters, with the state’s electorate leaning slightly Republican, although its governor and senators in Congress are Democrats.  

Despite Arizona’s Republican lean, there’s no denying that this bill will have a tough time. With no federal backing for crypto regulations and Arizona’s electoral climate currently being highly divisive, any hopes of a bipartisan agreement on crypto taxes are slim to none; nevertheless, SCR 1007’s sponsors will be looking to get the bill as much exposure as they can.

Republicans – And Crypto – Take the House

As for the crypto regulations at the federal level, 2023 will likely be the year that we will finally see some progress. Earlier this month, Politico reported that Republicans in the House of Representatives are planning to set up an oversight subcommittee on cryptocurrencies.

The Politico report claims that Partick McHenry, the North Carolina Republican who currently heads the House Committee on Financial Services, plans to set up the subcommittee as part of his vision of restructuring the entire Financial Services Committee in his tenure. The new subcommittee will reportedly focus on issues related to cryptocurrencies, financial technology, and financial inclusion. It is expected to be chaired by French Hill (R-AR), with Warren Davidson (R-OH) serving as vice chair. 

Although it is unclear whether the new subcommittee will be able to enact policies to govern the crypto space in the United States, it should at least have some power and input into the industry’s future. And with Republicans now gaining control of the House under Speaker Kevin McCarthy (R-CA), there is a significant possibility that more legislation and initiatives aimed at strengthening the crypto space in the country could be enacted going forward.