A bill was introduced in the Arizona Senate on January 9, which, if passed will allow the State to receive tax payments in the form of cryptocurrency.
The bill’s primary sponsor is State Senator Warren Petersen from the Republican Party. The three other sponsors are Senator Farnsworth, and Representatives Grantham and Weninger, who are also Republican.
Since it was introduced, the bill has made the rounds from the Senate FIN and Rules Committees and was read the second time on January 11. Further developments on the bill are yet to be made public.
The bill proposes amendments to the current State legislature on tax payments, which previously only mentioned payments through check. The amended version now talks about setting up a payment gateway for Bitcoin and other cryptocurrencies that will allow the tax department to convert those payments made in cryptocurrency, to their respective value in USD.
It was also mentioned that the payments would be converted on the prevailing rate within twenty-four hours before being credited to the taxpayer’s account.
Will this come into effect?
It is too early to tell right now.
Thinking of positive actions in the past, the Arizona Senate did pass a bill into a law, which pertained to the recognition of blockchain signatures and contracts along with protecting ownership rights for entities that secure information through blockchain.
While mentioning blockchain signatures, the bill stated that “a signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature.” It spoke the same language about contracts executed through blockchain.
For ownership rights secured via blockchain, the bill read that a person who “uses blockchain technology to secure information that the person owns or has the right to use retains the same rights of ownership or use concerning that information as before the person secured the information using blockchain technology.”
This shows that the Arizona Senate is open to accepting technological advances and acknowledging their ever-evolving role in day to day functions. Therefore, this could point towards the tax bill being met with positive reactions.
However, at the same time, it should be noted that the U.S. Government does not recognize Bitcoin or any other cryptocurrency as legal tender. The proposed bill does state that the payments made in cryptocurrency will first be converted to USD and will only then be credited to the taxpaying account, but passing this into law might allude to some that the government has started accepting cryptocurrencies in some form.
Judging by similar stances of major financial institutions and the Fed Chair on not recognizing cryptocurrency as legal tender, it does not seem that this particular bill will be welcomed by the propagators who back their approach. This suggests that having this bill passed into law would be a feat to achieve.
That being said, the final call is of the Arizona Senate, so we will need to wait to see the decision it makes about the bill shortly.