Arizona state Senator Wendy Rogers has introduced a package of proposals aimed at reshaping how digital assets are treated under state tax law. The measures include two bills and a constitutional resolution, all filed with the Arizona Senate on Friday, seeking to reduce or eliminate certain tax obligations tied to cryptocurrencies and blockchain activity.

The proposals would amend state statutes to exempt virtual currencies from taxation, prevent local governments from taxing or penalizing entities that operate blockchain nodes, and revise the state constitution’s definition of property taxes to explicitly address digital assets. While the bill focused on blockchain node operators could advance through the legislature on its own, the tax exemption bill and the constitutional amendment would require approval by voters at the next general election in November 2026.

Proposed exemptions and limits on local authority

One proposal would update Arizona’s constitution to clearly exclude virtual currencies from property tax, while a companion bill would introduce similar language into state statutes. Another bill would block counties, cities and towns from imposing “a tax or fee on a person that runs a node on blockchain technology,” effectively shielding node operators from local levies.

Arizona is among a small number of US states with an existing law that allows the state to claim ownership of digital assets deemed abandoned after at least three years. That provision was originally part of broader efforts by crypto advocates to establish a state-level digital asset reserve. Additional proposals have also surfaced that would expand Arizona’s authority to invest in cryptocurrencies such as Bitcoin.

Rogers previously co-sponsored a Bitcoin reserve bill that was vetoed by Arizona Governor Katie Hobbs in May. She criticized the veto at the time and stated that she intended to reintroduce the legislation in a future session. Requests for comment from Rogers had not been answered at the time of publication.

Diverging approaches across US states

Arizona remains one of the few US states, alongside New Hampshire and Texas, with legislation establishing a form of digital asset reserve. Elsewhere, lawmakers are pursuing a wide range of approaches to crypto policy, particularly around taxation.

In Ohio, the House of Representatives passed a bill that would exempt crypto transactions under $200 from state capital gains taxes, though the measure has not progressed since June. New York lawmakers have moved in the opposite direction, with a proposal to impose a 0.2% excise tax on digital asset transactions, including sales and transfers, which has remained in committee since August.

At the federal level, Wyoming Senator Cynthia Lummis introduced draft legislation in July proposing a de minimis exemption for digital asset transactions and capital gains of $300 or less. Lummis also announced on Friday that she plans to retire from the US Senate in January 2027.

Sources:

https://cointelegraph.com/news/arizona-bill-crypto-blockchain-taxes-ban

https://www.azleg.gov/legtext/57leg/2R/bills/SB1044P.htm