- Arizona Senator Wendy Rogers introduced bills and a resolution to change digital asset taxation laws.
- The proposed legislation includes exempting virtual currency from state taxes and banning local taxes on blockchain node operators.
- One bill could pass through the legislature, while the tax exemption and constitutional amendment require voter approval in 2026.
- Arizona is among the few U.S. states with laws related to digital asset reserves and abandoned cryptocurrency.
- Other states are exploring varied approaches to digital asset taxation, including exemptions and new excise taxes.
Arizona State Senator Wendy Rogers has introduced three legislative measures aiming to modify the state’s taxation framework for digital assets. The bills and a resolution were prefiled with the Arizona Senate on a recent Friday. The proposals include exempting virtual currency from state taxes (SB 1044), prohibiting counties, cities, and towns from taxing or fining blockchain node operators (SB 1045), and amending the state constitution’s definition of property taxes to clarify rules regarding digital assets (SCR 1003).
The bill targeting local taxation of blockchain nodes (SB 1045) is likely to move through the legislative process. However, the crypto tax exemption bill (SB 1044) and the related constitutional amendment (SCR 1003) require approval by Arizona voters during the general election scheduled for November 2026. SCR 1003 seeks to amend the state constitution to exclude virtual currency from property taxes. Similarly, SB 1044 would codify this exemption in state law. SB 1045 would prevent municipalities and counties from imposing taxes or fees on individuals running blockchain nodes, a key component of blockchain networks.
Arizona currently has unique legislation allowing the government to claim ownership of digital assets that have been abandoned for three or more years. This law was part of efforts by crypto advocates to create a digital asset reserve within the state. There are additional ongoing proposals aimed at giving the state authority to invest in cryptocurrencies such as Bitcoin (BTC). Senator Rogers was a co-sponsor of a Bitcoin reserve bill that was vetoed by Governor Katie Hobbs in May. Rogers has voiced her intent to refile the bill in the upcoming legislative session.
Across the United States, only a few states including Arizona, New Hampshire, and Texas have laws establishing digital asset reserves. Other states are proposing different regulations on digital asset taxation. For example, Ohio’s House of Representatives passed a bill to exempt cryptocurrency transactions under $200 from capital gains tax, though the legislation has not advanced since June. In New York, Assemblymember Phil Steck proposed a 0.2% excise tax on digital asset transactions, including sales and transfers, but it has not moved forward since August. At the federal level, Wyoming Senator Cynthia Lummis introduced a draft bill proposing a $300 de minimis exemption on digital asset transactions and capital gains. Senator Lummis announced her retirement from the U.S. Senate effective January 2027.
For detailed information, the texts of the bills can be found at the Arizona legislative website and SB 1045 document.
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