The state of Arizona is exploring the option of allowing residents to vote on whether or not they want property taxation to apply to virtual assets.
The plan was included in a bill presented to the Arizona State Senate, receiving support from Senators Wendy Rogers, Justine Wadsack, and Sonny Borrelli. If the bill sails through the legislative hurdles, Arizona residents could cast their votes for or against the application of property tax rules to virtual assets.
“Article IX, Section 2, Constitution of Arizona, is proposed to be amended as follows if approved by the voters and on a proclamation by the Governor,” the bill read.
The bill mentions virtual currency and defines it as a “digital representation of value that functions as a medium of exchange, a unit of account and a store of value other than a representation of the United States dollar or a foreign currency.”
If the bill is pushed through legislation, Arizona residents could exercise their voting rights in November 2024. At the moment, the bill SCR 1007 has scaled through two readings during the last week, but a new political climate in Arizona could see the outcome of the proposal swing positively for virtual currency enthusiasts.
The list included federal and state property with the addition of “stocks of raw or finished materials, unassembled parts, works in process or finished products” under tax exemption.”
Other items on the list include household goods that are not used commercially and public debts, “as evidenced by the bonds of this state and its counties.
Four million individuals have been registered to vote at the last count, with the Republican party having a slight lead of 34.67%. Democrats have a voting strength of 30.66%, while both parties will have to jostle for 33.89% of votes.
The state of virtual currency tax in the United States
Virtual currency tax in the U.S. is still subject to capital gains tax on the appreciation of the asset. The Internal Revenue Service (IRS) considers digital assets akin to stocks, with miners still subject to the same tax burdens.
However, various U.S. states have issued their own distinct tax rules, with states allowing residents to pay their taxes in virtual currency. Colorado is leading the march, and it is widely expected that more states will switch in the coming years.
“It’s a huge step for the industry that multiple states are having to really understand crypto, make rules around pricing digital assets for real tax purposes, and more,” said Patric White, CEO of tax software firm Bitwave.
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