Arizona’s cryptocurrency bill SB 1091 was originally intended to allow residents to pay their state income taxes with a variety of cryptocurrencies, but it is now undergoing a makeover before it heads to the House floor in the next couple of weeks.
Originally, the bill stated that residents could pay their taxes using Bitcoin and a few other altcoins, including Litecoin. Arizona Senator Warren Petersen said that the most recent changes will allow Arizona residents to make purchases using cryptocurrencies and have the sales taxes sent directly to the state.
This tax, which is called the transactional privilege tax (TPT), is used on all transactions in the state of Arizona. When somebody pays a merchant using cash or credit cards, a portion of the payment is sent directly to the state for the sales tax payment. If SB 1091 is passed, it would legitimize cryptocurrencies as a means of payment in Arizona and would make it much easier for merchants to accept cryptocurrencies. Currently, if a merchant accepts crypto as a means of payment, they would need to manually track the sales and calculate what is owed for the sales tax.
Senator Petersen said that the changes to the bill mark positive progress for the cryptocurrency industry and will encourage people to use cryptocurrencies as payments anywhere.
“We’re going to allow TPT payments at the point of sale using blockchain technology. That means you are going to use blockchain technology but you’re also going to have the ability to use that point-of-sale to pay with cryptocurrencies, cash, credit card — whatever you pay with. There will be an immediate sales tax payment made to the state of Arizona, whether it’s in cash, cryptocurrencies or credit card payment” Senator Petersen explained.
Other states have been looking into legitimizing cryptocurrencies by allowing them to be used to pay state taxes, but no state has gone as far as Arizona to legitimize cryptocurrency technology. Illinois and Georgia’s governments have both seen bills that allow cryptocurrencies as a form of payment for state taxes, but the bills haven’t made much progress due to a lack of understanding from the lawmakers.
As for Senator Petersen’s thoughts on the likelihood of SB 1091 being passed, he said:
“I think we will win the House and we’ll have the votes to get to the finish line. It still has to come back to the Senate. It still has a ways to go. But I feel good about it. I feel more optimism about this getting signed than the income tax bill.”