State Representative Warren Petersen speaking at a town hall hosted by the American Academy for Constitutional Education (AAFCE) at the Burke Basic School in Mesa, Arizona, October 7, 2014. / Gage Skidmore / Flickr
In the midst of bitcoin’s boom and subsequent bust, a bill to allow Arizonans to pay their taxes in cryptocurrencies passed the State Senate this month.
State Senator Warren Petersen (R-LD12) introduced SB 1091 which would allow taxes to be paid “using a payment gateway, such as bitcoin, litecoin or any other cryptocurrency recognized by the department, using electronic peer-to-peer systems.” The taxes paid via cryptocurrency would then exchange the cryptocurrency for dollars.
“It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for block chain and digital currency technology in the future,” said State Rep. Jeff Weninger (R-LD17).
Weninger is a co-sponsor of SB 1091 and the prime sponsor of HB 2602, which prohibits local regulation of cryptocurrency mining.
Given the volatility of cryptocurrencies, such a system would inevitably lead to taxes being slightly under or overpaid since it is unlikely that the conversion from the cryptocurrency to dollars would not be instantaneous.
State Senator and gubernatorial candidate Steve Farley believes that the bill unfairly places any burden that results from price volatility on other taxpayers.
“I think too often in our tax code, certain special interests get advantage, while everyone else pays the price,” Farley said. “This is the perfect example because the lobbyists who came up who spoke on behalf of this bill only wanted advantage for his particular client. That’s part of why our entire tax code becomes such a mess because you have special interest lobbyists going in there and trying to get a break for their own clients. The rest of us who aren’t present frankly we get screwed.”
SB 1091 is co-sponsored by Sen. David Farnsworth (R-LD16), Rep. Travis Grantham (R-LD12), and Rep. Jeff Weninger.
Petersen’s bill passed the Arizona Senate 16 to 13 along party lines. Sen. Robert Meza (D-LD30) did not vote. No action has been taken in the Arizona House yet.