Paying Your Taxes in Bitcoin? Arizona Bill Aims to Allow It
Bitcoin and other cryptocurrencies have been experiencing a few growing pains as of late, including falling prices and some banks cracking down on customers purchasing them with credit cards. However at least one state is looking to embrace the crypto craze. If a bill currently in the Arizona state legislature passes, it would allow residents of the Grand Canyon state to pay their taxes using Bitcoin — making them the first state in the country to do so.
As the Arizona Republic reports, Senate Bill 1091 is being sponsored by state Senator Warren Petersen — a Republican from the Phoenix suburb of Gilbert. It calls for the Arizona Department of Revenue to begin accepting Bitcoin and other crypto payments by 2020. Once the cryptocurrency transfer was completed, the amount would then be converted to U.S. dollars within 24 hours. The bill actually passed the Arizona State Senate last week and is now headed for the House.
Proponents of this Bitcoin bill say it will not only give taxpayers more options but will also signal to companies and enthusiasts that Arizona welcomes blockchain and crypto technology. Of course there are some in opposition to the proposed plan as well. Speaking before the Arizona Senate’s vote on the bill last week, Democrat Steve Farley of Tucson said, “What this does in effect is transfer the volatility risk off the person paying their taxes and onto the Department of Revenue and thus all other taxpayers. We take American dollars at the Department of Revenue to pay taxes. I think American dollars ought to be good enough.” To the first point, Petersen notes that the bill calls for the taxpayer to be held responsible if their payment falls short of their obligation once the conversion is completed. As the Senator explained, “Even if for some reason the state doesn’t receive what was sent, the state will only credit you with what is received.” Humorously, Peterson also addressed Farley’s concerns about the falling price of Bitcoin, saying, “What the good senator failed to mention, it is true that it has dropped … he forgot to mention it’s gone up 4,000 percent.”
While the implications are fairly limited, this proposed bill is actually an interesting development in the growth of cryptocurrencies. At a time when it seems governments are trying to work against Bitcoin and others, it’s certainly interesting to see at least one state potentially embracing them. Perhaps Petersen best summed up the current crypto climate best in saying, “Some of the people saying this is dumb are the same kind of people when the Internet first got going would say it’s dumb.” Fair enough, I say.