Arizona Lawmakers Target Crypto Taxes with New Bills
Arizona Senator Wendy Rogers has unveiled a set of legislative initiatives to reshape the state’s approach to digital assets and cryptocurrency taxation. Prefiled last Friday, the proposals include:
- SB 1044: Exempts virtual currency from state taxation.
- SB 1045: Prohibits cities, towns, and counties from taxing or fining entities that operate blockchain nodes.
- SCR 1003: A constitutional amendment clarifying that virtual currency is excluded from property tax.
While the blockchain node protection bill (SB 1045) could move through the state legislature directly, the crypto tax exemption bills (SB 1044 and SCR 1003) would require approval by Arizona voters during the November 2026 general election.
Key Features of the Arizona Crypto Tax Legislation
The legislation seeks to modernize Arizona’s tax code for the digital age:
- Property Tax Clarification: SCR 1003 would explicitly remove virtual currency from the definition of taxable property.
- State Statutes Update: SB 1044 would reinforce this exclusion in Arizona’s laws governing state taxation.
- Node Operator Protection: SB 1045 ensures that blockchain node operators cannot be taxed or fined at the local level, safeguarding the state’s emerging crypto infrastructure.
Arizona is among the few states with legal frameworks recognizing abandoned digital assets after three years, a law intended to support a potential state crypto reserve.
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Arizona’s Expanding Role in Crypto Policy
Senator Rogers has been active in advocating for a state-backed Bitcoin reserve, having co-sponsored a bill vetoed by Governor Katie Hobbs in May. She has pledged to refile the proposal in the next legislative session, emphasizing her commitment to positioning Arizona as a crypto-friendly hub.
Other states are exploring varying approaches to digital assets:
- Ohio: Proposed exempting crypto transactions under $200 from capital gains taxes.
- New York: Assemblymember Phil Steck suggested a 0.2% excise tax on digital asset transactions.
- Wyoming: Senator Cynthia Lummis drafted a de minimis exemption for transactions under $300, ahead of her retirement in January 2027.
These developments highlight a growing trend in the US, where state-level initiatives are diverging in their treatment of cryptocurrencies, from tax relief to limited regulatory oversight.
Looking Ahead: Arizona’s Crypto-Friendly Vision
The Arizona crypto tax legislation introduced by Senator Rogers positions the state as a potential leader in US crypto policy, protecting both individual investors and infrastructure operators. By exempting digital assets from property and income taxes and shielding node operators, Arizona could become a model for other states seeking to balance innovation, security, and investor protection.
