Arizona Crypto Tax Bill Edges Closer

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A bill that would open up cryptocurrency as a way of paying taxes in Arizona has moved a step closer to becoming law this week, following significant developments in the state legislature.

Following approval from the House Rules Committee, off the back of the green light from the Ways and Means Committee several weeks ago, the bill can now proceed to a full vote of the House, the final hurdle before it would ultimately be passed into law.

The Arizona cryptocurrency taxes bill has been seen as a potentially significant milestone in the increasing legitimacy of cryptocurrencies. Now, with the bill poised to become law, investors and academics are hoping Arizona can spark a trend among other state and national governments worldwide.

The bill would give the Arizona Department of Revenue license to collect taxes in bitcoin and other cryptocurrencies, as a valid form of paying any taxes due to the state. While in its early iterations the bill spoke exclusively of “bitcoin,” the latest version is being presented as “coin agnostic,” with no preference for one cryptocurrency or another, with the discretion ultimately resting with tax collectors.

One of the bill’s sponsors, Representative Jeff Weninger, has previously gone on the record as saying he was attempting to explain the significance of the bill to other lawmakers, to ensure the benefits were more widely understood.

Comprehension issues have been attributed to problems with similar bills in other states, such as Georgia, where attempts to introduce similar measures have effectively stalled during the legislative process.

At the time, Georgia Senator Mike Williams said it was “going to take educating decision-makers and government regulators on what cryptocurrencies are” to give the bill any hope of passing into law. So while the Arizona proposals are now at an advanced stage, there is still the possibility that the law could be derailed at the last minute, if it fails a vote of the House.

While Georgia and Arizona have notably attempted to revise the law to embrace cryptocurrency for taxes, albeit with varying degrees of effect, other states are ready to make similar moves. Illinois has proposals ready to present to the state legislature, for example, which seek to reflect a similar change in the law there.

Should these bills make it to the statute books, it is hoped they would encourage wider use and respect for cryptocurrencies as an officially recognized method of payment.