Arizona State Senate Approves Bill to Permit Tax Payments in Bitcoin

The state of Arizona appears set to become the next crypto hub in the United States. The state’s Senate has passed a bill that would allow taxpayers to pay their obligations with Bitcoin and potentially some other accepted digital coins in the near future.

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Timeline of the Bill

The process has yet to be complete, but is stepping up into the final phase of approval. Classified under Senate Bill 1091, the bill was initially introduced on January 10, 2018. It was approved shortly thereafter on January 24, in a 4-3 vote by the Senate Finance Committee.

Following an analysis of the bill and its corresponding terms and ramifications, the Senate officially approved the bill on February 8, by a 16-13 vote. One member omitted a vote, which would not have had an impact on the results regardless.

Potential Effects of the Bill

In the event that the bill is passed, it would mean that the incorporation of various cryptocurrencies for the purpose of tax Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, would be widely adopted by 2020.

One of the underlying responsibilities of the Arizona Department of Revenue, would be to assure the conversion of any tax payments made in crypto into US dollars, within 24 hours of receiving the payment.

The requirement likely is due to the high volatility that is typically associated with the value of cryptocurrencies, which could lead to risk taken upon the state government, in the event of a strong depreciation in the value of a crypto-tax payment.

Jeff Weninger, Arizona State Republican Representative, co-sponsored the bill, as an advocate of cryptocurrencies. He appears to be spearheading the state’s efforts to become a domestic leader for the U.S. Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term industry.

Mr. Weninger commented on the development of the Bill through the Senate: “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 blockchain and digital currency technology in the future.”

Bitcoin's Global Progression

While Arizona is taking charge for advancing Bitcoin through traditional government operations and financial practices, other countries have already preceded to take such steps in the past. Back in 2015, Isle of Man had similarly advanced the potential for meeting tax obligations through Bitcoin as a means of payment.

As governments continue their respective assessments of the crypto industry, various authorities have conflicting viewpoints. Last week, Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission (CFTC), supported the growing crypto market, further suggesting that his children were among a relatively young generation of investors.

Meanwhile, the introduction of Bitcoin futures by the CBOE and CME exchanges, offer further evidence of the beginning of U.S. mainstream acceptance of the industry as legitimate financial products.

While U.S. regulators appear more apt to accept Bitcoin and other virtual coins as financial instruments, the recent Chinese crackdown, which prohibits access to crypto exchanges and websites, indicates a converse point of view by Chinese counterparts.

The government of India was also bearish on crypto last week, committing to push forward its regulatory agendas for the industry by March 31.