Arizona’s Tax Bill Faces a Hard Time, Opposition Forces Become Stronger
In recent developments, the Senate Bill 1091 passed by Arizona House of Representatives has faced resistance. Initial voting has come up with negative results that can hinder the growth of the bill. Senate Bill 1091 allows citizens of the state to pay their taxes using digital currencies.
If accepted, the bill would change the framework of Arizona’s Department of Revenue as digital currencies have never been accepted as means to pay taxes before. The bill got passed in Arizona State Senate on February 8 and since then been under skeptical eyes. The bill stated that after collecting the taxes, the government would immediately convert the digital payments into US dollar bills, exactly within 24 hours of the payment.
Jeff Weninger, Arizona State Republican Representative said in favor of the bill, “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.”
According to the House revision, the Department of Revenue should explore the possibilities of another form of payment rather than completely accepting digital coins as means of payment.
The amendment bill reads, “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.”
It also suggests, “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.”
Even after compelling the Revenue Department to revise the bill the amendment does not explain the exact tie of the commencement of the study or the amount of time the department would take to come to a conclusion. The legislatures from both the houses will now be negotiating the terms of the bill.
Meanwhile, numerous states in the country have passed legislation about digital currencies and blockchain technology. Wyoming has passed a group of bills that have acknowledged digital currencies in a new asset class. On the other hand, Illinois and Georgia are also on the verge of creating a legislation through which virtual currencies would be accepted for taxation and license fees.
It should also be noted that the US has one of the largest crypto space and many private businesses have started accepting bitcoin and other altcoins for providing their services. Moreover, if the government includes virtual coins in its framework, then it would have a better knowledge of people dealing in cryptocurrencies. It would eventually help the government in collecting more taxes, unlike the recent Tax Day when large amount crypto holders did not show up.
But, due to their volatility, digital currencies can harm the tax collectors too. Eventually, it has become a matter of choice as nobody can guarantee crypto behavior, but in that sense, the behavior of tax depositors is also not finite.