Arizona Legislator Proposes Tax Ban on Crypto and Blockchain

Arizona State Senator Wendy Rogers has introduced two bills and a resolution in an effort to change the state's law on taxing digital assets.

In legislation filed with the Arizona Senate on Friday, Rogers proposed amending state statutes to exempt virtual currency from taxation (SB 1044), prevent counties, cities and towns from taxing or penalizing entities on blockchain nodes (SB 1045), and amending the state constitution's definition of property tax on digital assets (SCR 1003).

The Blockchain Crossroads Act may move through the state legislature, but the crypto tax bill and resolution will need a vote by Arizona voters in the next general election in November 2026.

SCR 1003 would make the Arizona constitution exempt virtual currency from property taxes, while SB 1044 would add similar language to state statutes. SB 1045 prohibits cities, towns and counties in the state from imposing “taxes or fees on any person operating a node on blockchain technology.”

Arizona is one of the few US states with a law on the books that allows the government to claim ownership of digital assets that have been discarded for at least three years. The law was part of an effort by crypto advocates to establish a digital asset reserve in Arizona, but there are other proposals to give the state more authority to invest in cryptocurrencies like Bitcoin (BTC).

Related: New Hampshire Governor Signs Crypto Reserve Bill into Law

Rogers was one of the sponsors of a Bitcoin reserve bill that was vetoed by Arizona Governor Katie Hobbs in May. The senator condemned the act and said he would amend the bill in the next session. Cointelegraph reached out to Rogers for comment but did not receive a response by the time of publication.

US states adopt crypto reserve accounts, various digital asset policies.

Along with New Hampshire and Texas, Arizona is one of the few US states that has a law establishing a digital asset inventory. Although some lawmakers in other states are trying to rally support for similar bills, there are many who are suggesting a different approach to digital property taxes.

For example, the Ohio House of Representatives passed legislation exempting crypto transactions under $200 from the state's capital gains tax. The law does not appear to have changed since June.

New York Assemblyman Phil Stack has proposed adding a 0.2% excise tax to state residents on “digital asset transactions, including the sale or transfer of digital assets.” The bill was referred to the Ways and Means Committee and has not appeared since August.

At the federal level, Wyoming Senator Cynthia Lammis introduced a bill in July that would have exempted digital asset transactions and capital gains of $300 or less. Lummis announced Friday that she will retire from the U.S. Senate in January 2027.

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