Arizona looks set to become one of the first states in the US to allow its residents to pay their taxes in cryptocurrencies like bitcoin, as lawmakers vote to progress new laws in support of cryptocurrency markets.
The development follows on from the announcement of the bill at the start of this month, which was sponsored by Senator Warren Peterson and three of his colleagues. According to the proposed text of the bill, the government would convert payments in cryptocurrency at the prevailing rate into USD within 24 hours.
“The Department [of Revenue] shall convert cryptocurrency payments to United States dollars at the prevailing rate within twenty-four hours after receipt and shall credit the taxpayer’s account with the converted dollar amount.”
The bill had been awaiting approval by the Arizona Senate Finance Committee, following its acceptance by the main state legislature. By 4-3, the Committee voted to back the proposals, which must now be considered by the Rules Committee.
While not a firm guarantee the bill will yet pass into law, the approval of the Finance Committee is regarded as a significant milestone in the passage of any bill, increasing the likelihood of its ultimate acceptance into law.
Addressing local media, the Senator responsible said the impetus for the proposals came from his constituents, and in a frequency he found surprising.
“Since I’ve started to work on this, I’ve been surprised how many people are holders of cryptocurrency, so probably more than you’d suspect.”
If it were to pass successfully, the law would be one of the first of its kind to accept cryptocurrencies for tax payments. The move is only the latest step taken by Arizona in supporting cryptocurrency through laws, including earlier efforts to officially recognise cryptocurrencies and crypto transactions.
The model would no doubt serve as a test case for other state authorities, and governments further afield, who may be considering embracing cryptocurrencies for payments in future.
Since being submitted on January 9, the bill has gained vocal support at a local level, as well as amongst lawmakers at the first stage in its lifecycle.
It remains to be seen whether the bill is ultimately accepted into law, and whether Arizona takes its opportunity to become a trailblazing state in accepting cryptocurrency tax payments.