During the first session of the Arizona State Senate seating for 2023, the trio of senator Wendy Rogers, Sonny Borrelli, and Justine Wadsack considered taking the vote of Arizonians on the possibility of drafting a bill that adds virtual currency to the list of properties with tax exemptions.
The draft (SCR 1007) described cryptocurrency as a “digital representation of value that functions as a medium of exchange, a unit of account and a store of value other than the representation of the United States dollar or foreign currency.”
Arizona’s constitution status on tax exemptions
Based on Arizona’s constitution stipulates all federal, state, county, and municipal property, home items, and public obligations, a limited number of “stocks of raw, finished materials, unassembled parts, works in process, or finished products have tax exemptions.
While at the federal level, Sales and purchases of cryptocurrencies in the United States are typically subject to federal capital gains taxes.
Recall that on January 19 and 23, the SCR 1007 bill underwent two readings as part of Arizona’s state Senate’s agenda, and there were previous efforts in 2018 to impose tax payment via crypto. Still, it was rejected by Doug Ducey, then state governor.
American state’s attempts at crypto tax
Arizona is not the only American state working on a possible crypto tax exemption; different states in America are also coming up with various policies related to crypto and taxation.
Mayor Scott Conger of Jackson, Tennessee, on July.16,2021, announced the city’s intention to vigorously explore tax payments in bitcoin (BTC).
Jared Polis, governor of Colorado, facilitated the use of cryptocurrency in making payments for income tax, severance tax, use tax, excise fuel tax, withholding tax, and sales tax.
Ron DeSantis, the Governor of Florida, in March.23,2022, while speaking during the signing of the financial literacy curriculum bill, revealed the state’s intention to start accepting tax payments in cryptocurrencies.
Other states like Alaska, New Hampshire, Nevada, South Dakota, Texas, Washington, and Wyoming offer potential investors a 0% capital gain tax.