Arizona Proposes A Bill To Accept Cryptocurrencies As Payment For Taxes

Arizona Might Accept Crypto As Tax Payment

The state of Arizona passed a bill recently which would allow people to pay “tax and any interest and penalties” using cryptocurrencies. The proposed bill will now be reviewed by the state’s House of Representatives and the Governor, and if approved, taxes paid for in cryptocurrency would be payable to the state’s Department of Revenue. After receiving the crypto payments, the state would then proceed to convert the digital currency into fiat (U.S.) within 24 hours. In order for this crypto tax bill to be implemented, it must also be approved the chamber. Furthermore, should the House and Senate pass different versions of the bill, then a mutually-acceptable decision needs to be taken regarding what exactly the bill will entail?

Back in January, this bill was cleared by the Senate’s Finance Committee by a 4-3 vote. According to Jeff Weninger, a Republican member of the House of Representatives, Arizona has shown interest in accepting tax payments in digital currencies as a means to accommodate the users of crypto-technology. Per the Arizona state representative, his state wants to send a message to the world that it’s “the place to be for blockchain and digital currency technology in the future”. Given this recent development, it seems that lawmakers are gradually becoming more accepting of cryptocurrencies and its underlying technology, the blockchain.

Gradual Adoption Of Cryptocurrencies

Two years ago, the majority (264 to 74) in New Hampshire’s House of Representatives voted against accepting cryptocurrencies as payment for taxes. Moreover, the state treasurer was asked to “develop an implementation plan for the state to accept bitcoin as payment for taxes and fees” . Eric Schleien, a Republican member of the New Hampshire House of Representatives, also advised using BitPay, a global bitcoin payment service, to process crypto payments because of its cost-effectiveness and high level of security.

Notably, almost all Republicans were in favor of the crypto tax bill. In fact, 16 Republican senators signaled their approval for the crypto-friendly measure through their vote. However, 12 Democrats and 1 republican voted against the measure. If the bill gets approved by all relevant authorities, then it would become effective for “taxable years beginning from and after December 31, 2019”.

A Positive Sign For The Cryptosphere

Although Arizona might have started the movement towards accepting cryptocurrency as tax payment, it’s not the only state that is attempting to become more crypto-friendly. The state of Tennessee has expressed an interest in officially approving cryptocurrencies and smart contracts as an acceptable way to conduct financial transactions.

Clearly, these are some encouraging words and overall a positive sign for the cryptosphere. This crypto-friendly bill also happens to be proposed at a time when federal regulators such as the U.S. SEC and CFTC have indicated that they want to adopt a “do no harm approach” to cryptocurrencies. American regulators even went as far as saying that crypto-technology could trigger a “paradigm shift”. If this crypto-friendly trend continues to spread across the United States, then it would also influence how other countries and world leaders respond to the crypto-world. This is especially considering that the United States is the world’s most powerful and influential superpower.