Arizona will become the second state to debate paying taxes in bitcoin after New Hampshire. The bill is sponsored by state Senator Warren Petersen and supported by three other lawmakers. If the bill is approved, it will allow people to pay their taxes in not only Bitcoin but also with other cryptocurrencies.
According to the Arizona State public records Bill Text: AZ SB1091 | 2018 | the bill was submitted on 9th January for consideration and later referred to the Arizona Senate Rules Committee. The bill stated that it would act as the gateway for electronic peer- to – peer systems where the residents can use the crypto coins to pay their taxes, interest, and penalties accrued over the years.
The bill further states that:
“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.”
This, however, raises concerns to many as the crypto world is so volatile, with daily side swing common and at times gaining or losing close to 10-30%. This is evident as recently the bitcoin just attained its high of $17000 after its lowest drop in December or around $1300, The BTC failed to hold the position and fell to around $13500 this week. This was experienced across the crypto world with ripple falling to its lowest of $2.3 reducing its market cap to roughly $89 billion.
A similar bill was introduced in New Hampshire in January 2016 by state representative Eric Schleien hoping citizens to pay their taxes and fees using Bitcoin. He told the New Hampshire General Court Ways and Means Committee:
“If New Hampshire can lead the way in the primary process, and we can lead in other ways, why don’t we lead the way to being the first state to actually implement a process? It’s going to happen; all 50 states are going to do this. Why don’t we be the first?”
The bill however, faced and opposition leading to a loss of 264 to 74 to kill the bill. Legislators were worried about exchange and transaction risks associated with the digital currency and to what level the state would be exposed.
The state of Arizona seems likely to adopt the bill based on their past track record on adopting tech bills. Last year in spring, the same state passed a bill recognizing blockchain signatures and smart contracts.