- Arizona lawmakers are considering making cryptocurrencies a tax-exempt form of property
- By classing crypto in a certain bracket, Arizona could treat it like certain types of property
- The bill has already passed two readings this year
Arizona lawmakers are considering making cryptocurrencies a tax-exempt form of property. State Senators Wendy Rogers, Sonny Borrelli, and Justine Wadsack have introduced a bill, SCR 1007, that would allow Arizona residents to vote on amending the state’s constitution to make virtual currency tax-exempt. If passed, the measure would be placed on the ballot in November 2024 for voters to decide.
Crypto to be Treated as Property?
Crypto gains are taxed as a capital gain at a federal level, although this bill would seek to put cryptocurrencies in line with all federal, state, county and municipal property, public debts, and many household goods, which are exempt from such taxation. Bill SCR 1007 has already passed two readings in the state Senate’s calendar, on January 19 and 23, enjoying more success than previous legislation related to crypto and taxes – a 2018 bill allowing residents to submit tax payments in crypto was attempted but did not pass.
The legislation contained in SCR 1007 will face a different political climate than previous attempts at crypto legislation however – the bill’s sponsors, Rogers, Borrelli and Wadsack, who are all Republicans, have either denied or questioned the legitimacy of some state and federal lawmakers’ elections.
U.S. States Have Differing Outlooks
In the U.S., cryptocurrency transactions are generally subject to capital gains taxes at the federal level, although individual states have proposed different policies related to crypto and taxes. For example, Colorado Governor Jared Polis has allowed residents to pay taxes using cryptocurrency, and states such as Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming offer 0% capital gains tax for potential investors.
Last October the Inland Revenue Service changed its taxation rules to put crypto and NFTs in the same tax category, while a Singapore court ruled the same month that NFTs should be classed as property, so the concept isn’t totally alien, although this is a different distinction.
