On February 8, the Arizona State Senate passed a bill that would permit state residents to pay their state and local taxes using cryptocurrency. According to the bill, the state government would receive the payment and then convert it into dollars within 24 hours.
But as Schoolhouse Rock! taught us, for a bill to become a law, it must pass in both the senate and the house, and it was in the Arizona State House of Representatives where the bill lost its power.
While the house did pass Senate Bill 1091, it did so with numerous amendments. One of the amendments alters the language regarding the acceptance of cryptocurrencies for tax payments. The exact language of the passed bill is as follows:
“The department shall study whether a taxpayer may pay the taxpayer’s income tax liability by using a payment gateway, such as Bitcoin, Litecoin or any other cryptocurrency that uses electronic peer‑to-peer systems. The department shall study the conversion of cryptocurrency payments to United States dollars at the prevailing rate after receipt and shall study the process of crediting the taxpayer’s account with the converted dollar amount actually received less any fees or costs incurred by the department for conversion.”
In other words, cryptocurrencies will not be accepted at this time, but the Department of Revenue will be studying the idea.
Of course, this is not the end of the road. Because the house has altered the language of the bill, now the house and the senate will need to negotiate the terms of the bill and come to a resolution both can agree upon. It is possible that members of the senate will demand that the acceptance of cryptocurrency payments move forward immediately.