Arizona Lawmakers Advance Bill to Exempt Crypto From Property Taxes

The Arizona State Legislature is moving forward with a key bill aimed at providing significant tax relief and regulatory clarity for the digital asset industry. Senate Bill 1066 (SB 1066), along with its corresponding House measure, seeks to explicitly exempt virtual currencies from state and local property taxes by removing them from the definition of “tangible personal property” within the state tax code.

The bill’s advancement through various committees marks a strong effort by Arizona lawmakers to position the state as a favorable destination for cryptocurrency holders and blockchain technology companies. Currently, the ambiguity surrounding the classification of digital assets has raised concerns that they could be subject to property taxes typically applied to physical assets such as real estate or equipment.

Proponents of SB 1066 argue that the volatile and non-physical nature of cryptocurrencies makes them ill-suited for traditional property tax frameworks, which require annual assessment of value. Imposing such taxes, they contend, would create insurmountable compliance hurdles for taxpayers and stifle innovation within the burgeoning digital economy.

By ensuring that Bitcoin, Ethereum, and other virtual currencies are definitively exempt from these assessments, Arizona hopes to reduce regulatory burdens and attract investment. While federal law still requires digital assets to be taxed as property for capital gains purposes when sold or exchanged, the state-level exemption provides a clear competitive advantage in the race among states to foster crypto-friendly environments. The legislation now moves toward final votes, signaling a major step toward codifying tax relief for digital asset owners in Arizona.

Source: Arizona Lawmakers Advance Bill to Exempt Crypto From Property Taxes