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Arizona Lawmakers Strip Crypto Mentions From Tax Payments Bill

Arizona’s long-in-the-making cryptocurrency tax payments bill has been further stripped down – so much so that it no longer mentions the technology at all.

The final version of Senate Bill 1091 does not mention cryptocurrencies in any way, despite three previous versions of the bill all specifically including cryptocurrencies as a possible payment method, public filings show. The version of the bill approved by both the House of Representatives and the State Senate does say that the Department of Revenue “may develop, adopt and use a payment system that enables the immediate remittance and collection of tax.”

It goes on to explain:

“The Department of revenue may design, develop and provide for trial demonstrations of the adaptation, application and use of technology to enable immediate remittance and collection of transaction privilege tax payments, at the option of the taxpayer, at the point of sale and for payments of additional amounts after audit.”

However, it is unclear whether this technology refers to cryptocurrencies or a traditional banking system.

The bill originally sought to enable Arizona’s Department of Revenue to collect cryptocurrencies, like bitcoin, for tax payments. The bill was introduced in January and quickly passed through several committees before being referred to the House, as previously reported. Committees in the House similarly approved the bill’s passage, but it stalled at the beginning of March.

Representative Jeff Weninger, one of the bill’s cosponsors, later told CoinDesk that the bill was being modified to become more neutral. While the original version specifically mentioned bitcoin, the new version was supposed to be “agnostic” about which cryptocurrencies could be collected, he explained.

Following the revamp, the bill was approved by the House Rules Committee and sent up to Ways and Means.

However, a new version was passed by the full House at the end of April. Rather than enabling the Department of Revenue to collect taxes through cryptocurrencies, the bill directed the Department to study “whether a taxpayer may pay the taxpayer’s income tax liability by using a payment gateway.” Possible gateways included bitcoin and litecoin, among other cryptocurrencies.

Senators Warren Petersen and David Farnsworth and Representative Jeff Weninger, the sponsor and cosponsors respectively, did not immediately respond to requests for comment. Representative Travis Grantham could not be reached.

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Arizona's Bid to Accept Crypto for Taxes Suffers Setback

Arizona’s cryptocurrency tax payments bill was passed by the state’s House of Representatives, but with a caveat: it is now almost completely different.

Public records show that the Arizona House of Representatives passed Senate Bill 1091 on April 30 by a 43-14 vote. That comfortable passage aside, the measure is now starkly different from the one originally submitted – and later passed – in the Arizona Senate.

Now, the two chambers enter talks to reconcile the differences, with lawmakers from the House and the Senate being named to undertake the task.

By far the biggest change is that the mandate aimed at Arizona’s Department of Revenue – which would have cleared the way for it to accept cryptocurrency as payment for tax liabilities – has been walked back.

If implemented as-is, the House version would merely require the Department to study the issue and that it “may develop, adopt and use a payment system that enables the immediate remittance and collection of tax in real time at the point of sale, including payments of additional amounts after audit.”

As the bill explains further:

“The Department shall study whether a taxpayer may pay the taxpayer’s income tax liability by using a payment gateway, such as bitcoin, litecoin or any other cryptocurrency that uses electronic peer-to-peer systems. The Department shall study the conversion of cryptocurrency payments to United States dollars at the prevailing rate after receipt and shall study the process of crediting the taxpayer’s account with the converted dollar amount actually received less any fees or costs incurred by the Department for conversion.”

The bill does not define when this study would begin or how long it might take for the results to be compiled into a report. It is further unclear whether Arizona would allow its tax officials to collect payments using cryptocurrencies at a later date.

Senator Warren Petersen’s office did not immediately respond to a request for comment.

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Arizona's Crypto Tax Payments Bill Clears Hurdle

A key committee in Arizona’s House of Representatives has given its blessing to a bill that would clear the way for the state to accept cryptocurrencies as payment for taxes.

The House Rules Committee voted to approve the measure – which as CoinDesk previously reported has been subject to revision – on Monday, ending what appeared to be a freeze on the bill after the House Ways and Means Committee gave its approval early last month. It now proceeds to the full House for a vote.

If finalized and approved, the bill would empower the Arizona Department of Revenue to collect taxes in the form of cryptocurrency – and make the state the first in the U.S. to officially accept a cryptocurrency as payment.

While an old version of the bill named bitcoin, the new version is more “agnostic” toward which coins might be accepted and gives more leeway to tax officials, according to Representative Jeff Weninger, one of the proposed law’s sponsors. Weninger told CoinDesk earlier this month that the bill’s sponsors were working to make it more easily understood by the legislature’s other members, but hoped to pass it within weeks.

And though Arizona appears to be moving ahead with its cryptocurrency tax plan, other states haven’t been so successful.

Georgia State Senator Mike Williams told CoinDesk earlier this month that the bill he sponsored has stalled due in part to a lack of understanding among lawmakers there.

“[Passing the bill is] going to take educating decision-makers and government regulators on what cryptocurrencies are,” Williams said at the time.

Illinois is also considering a similar tax payments measure. As of April 13, that bill was being considered by the Illinois House of Representative’s Rules Committee, public records show.

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Arizona's Crypto Tax Payments Bill Is Being Revamped

Arizona’s cryptocurrency tax payments bill is being reworked, according to one of its sponsors, with the hope of putting it forward for a vote in the coming weeks.

In an interview with CoinDesk, Arizona Representative Jeff Weninger detailed the work being done on the measure, which, as previously reported by CoinDesk, would allow residents in the state to pay their tax liabilities with cryptocurrency.

The Arizona Senate advanced the measure back in February, but public records seemed to indicate that the proposed law was stalling in the House of Representatives after a committee had recommended its passage.

“We’re still working on moving it,” Weninger said, explaining that he was working with Senator Warren Petersen – who drafted the measure – on some changes. One key alteration would make the language more “agnostic” about which cryptocurrencies can be used, with the term “bitcoin” specifically being stripped out of the bill itself.

“I made some changes to it with Senator Petersen’s permission that we would become more agnostic about name specific digital currencies. We’re leaving it up to the Revenue Department to pin that.”

Weninger indicated that the reworked bill would also leave it up to tax officials to decide whether they would set up their own method of exchanging crypto to U.S. dollars, or arrange “a competitive process to let startups compete to convert it and send U.S. dollars,” he added.

“I’m hopeful that and anticipating that it’ll be there in the next week or two. There’s a lot going on and we’re doing everything we can to get all the members comfortable with it and understand it,” he said, explaining that some lawmakers were expressing caution due to a lack of understanding about the tech – a circumstance that scuttled a similar measure in the U.S. state of Georgia.

Speaking more broadly, Weninger argued that Arizona has positioned itself as a positive environment for startups working with the tech, owing to the legislation passed to date. The first of those, signed into law last year, was submitted by Weninger and recognized blockchain signatures and smart contracts as legally valid.

“I think with the package of bills that we’ve done, we’re showing that we’re welcome to these new-age entrepreneurs and this new technology and we’re very much encouraged and we hope people are noticing it,” he told CoinDesk, adding:

“We hope to lead on this and other technologies in the future.”

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Arizona's Governor Signs Latest Blockchain Bill Into Law

Arizona corporations can now hold and share data on a blockchain following the signing of new legislation into law by the U.S. state’s governor.

The bill, first introduced by Representative Jeff Weninger, amends the Arizona Revised Statutes to recognize data written and stored on systems using the technology, as previously reported. Governor Doug Ducey signed the measure on April 3.

The Arizona House passed the bill within eight days of its introduction, records show, and the senate followed suit roughly a month later. While the senate unanimously voted to pass the bill, four House Representatives voted against or abstained.

The amendments come a year after Arizona began recognizing signatures recorded on a blockchain and smart contracts as legal documentation. Also signed by Ducey, that law allows these signatures to qualify as legal electronic signatures, meaning individuals can sign records or contracts on a blockchain.

The new legislation comes amid increased interest in blockchain applications across U.S. state governments.

Lawmakers in Delaware advanced and passed similar measures in 2017, becoming the first U.S. state to provide a legal basis for trading stocks on a blockchain.

Also last year, a lawmaker in New York introduced four bills aimed at evaluating blockchain applications for data storage purposes, as previously reported by CoinDesk.

Similarly, a bill introduced to the Nebraska legislature earlier in 2018 would, if passed, also allow the state to recognize smart contracts and documents stored on a blockchain. The bill would also “authorize and define smart contracts,” as well as allow the government itself to adopt distributed ledger technology.

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Arizona's Blockchain 'Node Rights' Law Is Nearing Passage

A proposed law that would put in place protections for operators of blockchain network nodes is inching closer toward passage, public records show.

House Bill 2602, sponsored by Representative Jeff Weninger, received “do pass” recommendations from the State Senate Rules Committee and the Committee of the Whole last week, setting the measure up for a vote by the full Senate. Both caucuses within the Senate have also given their approval, according to data from LegiScan, which tracks legislative developments in the U.S.

While it’s not exactly clear when the final vote will take place, the bill passed the state’s House of Representatives just days after similar endorsements were made in February. The measure previously passed the House with a vote of 55 to 4, with one representative abstaining, on February 20.

The bill would protect users running blockchain nodes from being subjected to any form of local regulation, stating that “a city or town may not prohibit or otherwise restrict an individual from running a node on blockchain technology in a residence.” Similar language puts in place a prohibition on county-level regulations.

As previously reported, it is unclear whether the measure would be restricted to cryptocurrency miners, but if signed into law, though the text suggests that the protections are aimed at covering the energy-intensive process.

“For the purposes of this section, ‘running a node on blockchain technology’ means providing computing power to validate or encrypt transactions in blockchain technology,” the bill states.

Another bill sponsored by Weninger, 2603, also passed the Senate Transportation and Technology Committee unanimously last week. As previously reported, this bill, if passed and signed into law, would amend Arizona’s regulations to legally recognize data stored on a blockchain.

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Arizona's Bitcoin Tax Bill Just Got a Big Vote of Confidence

A committee in the Arizona House of Representatives has recommended the passage of a bill allowing state residents to pay their tax bills in bitcoin.

Public records show that the House’s Ways and Means Committee advanced the measure on March 7. While the bill won’t be finalized until the full House puts it up to a vote, the endorsement raises the likelihood that it will be sent to the governor’s desk for signature – and become state law.

Lawmakers first began considering the measure back in January, as CoinDesk previously reported. If approved, residents can pay “tax and any interest and penalties” using “bitcoin or other cryptocurrency.” While the specifics of this process will likely need to be fleshed out further, the measure also calls for the state’s Department of Revenue to convert the cryptocurrency to U.S. dollars within 24 hours.

Arizona’s State Senate passed the bill by a 16-13 vote on February 8, as reported at the time, and the bill was then passed on to the House just over a week later.

If the bill is eventually signed into law, Arizona would become the first U.S. state to accept cryptocurrencies for tax payments. But it may not be the last – as CoinDesk has reported, lawmakers in Illinois and Georgia have made similar proposals, though it remains to be seen whether those measures will enjoy similar support.

Recent comments from one of the bill’s co-sponsors suggest that the measure fits into a wider plan to make Arizona an accommodative environment for the tech.

“It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for blockchain and digital currency technology in the future,” Arizona State Rep. Jeff Weninger told Fox News last month.

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Cryptocurrency Accepted as Tax Payments – Georgia Next

Following up Arizona, Georgia is the next state in the row to possibly accept digital currencies as a form of state tax-payments, based on a bill that was introduced on Feb 21.

Joshua McKoon and Michael Williams – Republican state senators, introduced the Senate Bill 464 which proposes that:

“the commissioner shall accept as valid payment for taxes and license fees any cryptocurrency, including but not limited to Bitcoin, that uses an electronic peer-to-peer  system.”

The introduced bill specifies that the moment when the payments will come in, the commissioner would be converting the digital currencies to US Dollars within no more than a day – 24 hours.

The move is very similar to that of the Senate of Arizona which did just run a bill which would validate cryptocurrencies to be used as a tax-paying method with 13 votes against, 16 in and on abstaining:

“A taxpayer may pay their income tax liability using a payment gateway such as bitcoin, litecoin or any other cryptocurrency recognized by the department, using electronic peer to peer systems,” the bill says before further adding:

“The department shall convert cryptocurrency payments to United States dollars at the prevailing rate after receipt and shall credit the taxpayer’s account with the converted dollar amount actually received less any fees or costs incurred by the department for conversion.”

If all goes well [meaning that the final round – The House accepts the bill to become law] Arizona will be the first to declare such legislation in the western side of the globe.

Despite the fact that the announcement might sound at first as a positive development, according to Robert Wood – tax law expert, paying taxes the cryptocurrencies might lead the way to paying more of mentioned above, as the increases in cryptos used for tax payments could themselves be subject to capital gains tax and investment income tax.

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Crypto Nodes Are One Step Closer to Legal Protection in Arizona

Proposed protections for cryptocurrency node operators are moving ahead in Arizona’s legislature, public records show.

House Bill 2602, which was filed on Feb. 6 by Representative Jeff Weninger (R.-17), passed the Arizona House of Representatives on Feb. 20 with 55 votes out of a possible 60. The measure will now be sent to the State Senate for further deliberation.

The bill’s provisions seek to prevent town and county governments in the state from imposing restrictions on people who run such nodes in their residences, saying that the matter “is of statewide concern and not subject to further regulation” in those local jurisdictions.

Weninger’s measure does not specify whether it is restricted to cryptocurrency miners, but it does state specifically that individuals using computing power to either validate or encrypt a transaction on a blockchain are protected.

Stepping back, the bill is just one of several making their way through the Arizona legislature. Another bill sponsored by Weninger would formally define the terms “virtual coin,” “blockchain,” and “virtual coin offering” within the state’s legal framework.

If passed, that particular bill, submitted earlier this month, would define when an initial coin offering (ICO) qualifies as a securities offering under existing law.

More significantly, however, is another bill recently passed by the Arizona Senate which would empower the state government to accept taxes in bitcoin and other cryptocurrencies. This bill would, if approved, require Arizona’s Department of Revenue to convert the cryptocurrencies into U.S. dollars within a day of receiving them as payment.

This bill was introduced in the Senate by Senator Warren Petersen (R.-12), and Weninger is sponsoring its House equivalent. Public records indicate that the measure was given a second reading on Feb. 20.

Arizona House of Representatives image via Thomas Trompeter / Shutterstock

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Arizona Law Would Define When ICOs Are Securities

The number of blockchain bills before the Arizona state legislature is growing, public records show.

Arizona state representative Jeff Weninger introduced two measures focused on the tech last week, including one that would begin laying down ar regulatory framework for initial coin offerings (ICOs) conducted in the state.

Two new bills introduced by the representative include “virtual coin,” “blockchain” and “virtual coin offering” as new terms to be included in the Arizona government’s list of definitions, particularly as they relate to securities and crowdfunding.

Notably, the first bill defines “virtual coin” as “a digital representation of value that can be digitally traded and that functions as a medium of exchange, unit of account and store of value.”

The bill goes on to define a “virtual coin offering” as any token sale where the token is treated as a security as defined by existing Arizona law. However, tokens which are not marketed as investments and which the purchaser can utilize or redeem within 90 days, according to the bill, would sit outside that definition.

The second bill amends the Arizona Revised Statutes to account for data that is written and stored on a blockchain. In a way, the bill bears a relation to a past Weninger bill which legally recognized blockchain signatures and smart contracts, a measure that was signed into law last year.

Stepping back, the state government has made several steps in recent weeks to broaden the adoption of the tech within the state. Earlier this month, the State Senate completed work on a bill which would allow the government to collect taxes in bitcoin.

Arizona legislature image via Nagel Photography / Shutterstock

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