Arizona lawmaker proposes barring taxes on crypto and blockchain

Arizona is making headlines as state Senator Wendy Rogers introduces significant bills aimed at changing how digital assets are taxed in the state. This move could potentially reshape the landscape for cryptocurrencies and blockchain technology in Arizona.

Arizona Senator Wendy Rogers introduces bills to change crypto tax laws

Senator Rogers has put forward two bills along with a resolution that could allow voters in Arizona to alter the state's taxation framework concerning digital assets. The proposed changes come at a time when many are looking to clarify the legal standing of cryptocurrencies and blockchain technology.

Proposed legislation includes exemptions for virtual currency and blockchain nodes

The legislation, which was prefiled with the Arizona Senate, includes three key components. The first bill, SB 1044, seeks to amend state laws to exempt virtual currency from taxation. The second bill, SB 1045, aims to prevent counties, cities, and towns from imposing taxes or fines on entities that operate blockchain nodes. Lastly, SCR 1003 would modify the state constitution to explicitly exclude virtual currencies from property taxes.

Voter approval required for some proposals in the 2026 general election

While the blockchain node bill may progress through the state legislature more easily, the tax exemption bills will require a vote from Arizona residents during the upcoming general election in November 2026. This means that voters will have a direct say in whether these significant changes to the tax code will take effect.

Arizona among few states with digital asset reserve laws and different approaches

Arizona stands out as one of the few states in the U.S. with a law that allows the government to claim ownership of abandoned digital assets after a period of three years. This law was part of broader efforts by crypto advocates to establish a digital asset reserve within the state. Additionally, the state has seen various proposals aimed at enhancing its authority to invest in cryptocurrencies, including Bitcoin.

Rogers previously co-sponsored a Bitcoin reserve bill that was vetoed by Governor Katie Hobbs earlier this year. Following this setback, she expressed her intention to refile the bill in the next legislative session, showcasing her commitment to advancing Arizona's position in the cryptocurrency space.

As discussions around digital asset taxation and regulation continue to evolve, Arizona's legislative moves could set a precedent for how other states approach similar issues. With the growing interest in cryptocurrencies, the outcome of these proposals may have significant implications for the market and for builders in the blockchain ecosystem.

In contrast to Arizona's proactive stance, other states are exploring varied approaches to digital asset taxation. For example, Ohio has considered exempting crypto transactions under $200 from state capital gains taxes, while New York has proposed an excise tax on digital asset transactions. Meanwhile, at the federal level, there are efforts to introduce exemptions for small digital asset transactions, indicating a complex and dynamic landscape for cryptocurrency regulation.