Arizona Lawmaker Proposes Tax Exemptions for Crypto and Blockchain

Arizona's state Senator Wendy Rogers has introduced two bills and a resolution aimed at changing tax laws for digital assets within the state. This initiative includes proposals to exempt virtual currencies from taxes, restrict local governments from taxing blockchain operations, and amend the state constitution regarding digital assets.

Key Takeaways

Tax Exemptions Proposed: Senator Wendy Rogers has proposed legislation to exempt virtual currencies from taxation and restrict local taxation on blockchain node operations.
Legislation Breakdown: Two bills (SB 1044 and SB 1045) and a resolution (SCR 1003) were introduced, with varying paths to enactment.
Voter Approval Needed: The crypto tax bill and resolution require voter support in the November 2026 elections.
Current State Laws: Arizona has existing laws regarding abandoned digital assets and ongoing discussions around state investment in cryptocurrencies.
Broader Context: Different U.S. states are exploring various approaches to digital asset taxation, with some favoring exemptions while others propose new taxes.

Arizona lawmaker proposes barring taxes on crypto and blockchain

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Recently, Arizona state Senator Wendy Rogers has taken steps to modify tax regulations surrounding digital assets by proposing two bills and a resolution aimed at tax exemptions. These measures were pre-filed with the Arizona Senate on Friday and are designed to amend existing laws.

The first bill, known as SB 1044, aims to provide an exemption for virtual currency from state taxation. The second, SB 1045, would prevent counties, cities, and towns from taxing or imposing fines on those operating blockchain nodes. Additionally, SCR 1003—a constitutional amendment—seeks to specifically exclude virtual currency from property taxes.

While the blockchain node bill is likely to progress through the state legislature, the tax-related measures will need to go before Arizona voters in the general election scheduled for November 2026. If passed, SCR 1003 would amend the state’s constitution to clarify that virtual currency is not subject to property tax, paralleling the tax exemption proposed in SB 1044. Moreover, SB 1045 would inhibit local governments from enforcing taxes or fees on individuals managing blockchain nodes.

Cryptocurrencies, Law, Taxes, Arizona
Bill barring cities or towns from taxing blockchain node activity: Source: Arizona legislature

Arizona currently stands out as one of only a few states in the U.S. that has enacted a law authorizing the state to claim ownership of digital assets deemed abandoned after three years. This legislation came as part of an effort by crypto supporters to create a digital asset reserve in Arizona. Additional proposals also aim to empower the state to invest in cryptocurrencies such as Bitcoin.

Senator Rogers previously co-sponsored a Bitcoin reserve bill that was vetoed by Arizona Governor Katie Hobbs in May. Following the veto, Rogers condemned the decision and indicated plans to reintroduce the bill in the next legislative session. Cointelegraph has sought comments from Rogers but had not received a response by the time of publication.

Evolving Landscape: Other States' Crypto Approaches

Arizona is among a select number of states, including New Hampshire and Texas, that have laws establishing a digital asset reserve. While some lawmakers in various states are advocating for similar measures, there are contrasting proposals for treating digital asset taxation.

For instance, Ohio's House of Representatives approved a bill that would exempt crypto transactions costing less than $200 from state capital gains taxes, though the bill's progress has stalled since June. Conversely, New York Assemblymember Phil Steck has recommended a 0.2% excise tax on digital asset transactions for residents, but this bill has also seen little advancement since August.

On a federal level, Senator Cynthia Lummis from Wyoming introduced a draft legislation in July proposing a de minimis exemption for digital asset transactions and capital gains of $300 or less. Recently, she announced her retirement from the U.S. Senate, effective January 2027.

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