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Arizona State Senate lawmakers are considering an initiative to let voters decide whether virtual money should be exempt from property taxes. Senators Wendy Rogers, Sonny Borrelli, and Justine Wadsack suggested letting Arizonans vote on whether to change the state's constitution to include a provision regarding property taxes in legislation that was submitted in the inaugural session of the Arizona State Senate in 2023.
Voters could decide to exempt virtual money from taxes in November 2024 if the legislation is approved by the legislature, specifically tokens that are not "a representation of the United States dollar or a foreign currency."
All federal, state, county, and municipal property in Arizona is free from taxes, as are numerous home items, public obligations, and a limited number of "stocks of raw or finished materials, unassembled parts, works in process, or finished products," according to the state's constitution.
On January 19 and January 23, SCR 1007 underwent two readings as part of the state Senate's agenda. Legislation relating to cryptocurrency and taxes has been proposed by lawmakers in prior sessions, such as a 2018 bill that would have allowed people to pay their taxes in cryptocurrency but was rejected by the governor at the time, Doug Ducey.
Although Rogers, Borrelli, and Wadsack, all Republicans, have either dismissed or questioned the fair and lawful election of some state and federal representatives, the proposed legislation would face a different political environment than that of 2018 or even 2022. Sales and purchases of crypto assets in the United States are typically subject to federal capital gains taxes.
The governor of Colorado, Jared Polis, has advocated enabling residents to pay taxes in cryptocurrencies, and lawmakers in Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have proposed offering potential investors zero percent capital gains tax rates.