Key Highlights
- Arizona Senator Wendy Rogers prefiles bills and a constitutional resolution to protect crypto from state and local taxes.
- SB 1044 and SB 1045 aim to exempt virtual currencies and blockchain node operators from state and local taxes.
- SCR 1003 would amend Arizona’s constitution to explicitly exclude digital assets from property taxes.
Arizona state’s Senator Wendy Rogers has prefiled legislation on December 19 along with a constitutional resolution in support of blockchain-related activities against taxes by the state. The measures will make Arizona one of the friendliest jurisdictions to crypto in the US, as it will give crypto users and blockchain businesses legal certainty.
The bill SB 1044 seeks to exempt virtual currencies from state taxation, and bill SB 1045 would bar cities, towns, and counties from imposing taxes or fees on individuals or businesses that operate blockchain nodes. The legislation, known as SCR 1003, would alter the state constitution to state that digital assets are exempt from property taxes.
While SB 1045 (the node protection bill) can be enacted through the standard legislative process, the broader tax exemptions in SB 1044 and the constitutional change in SCR 1003 would require voter ratification during the November 2026 general election.
Blockchain node protections
The regulation of lawfully accessing or using computational power, or operating a blockchain node within a residence, is considered a matter of statewide concern. Under this framework, cities and towns cannot impose taxes or fees on individuals running blockchain nodes at home, preventing local governments from creating additional regulations or financial burdens.
Arizona is already among the few U.S. states with laws recognizing digital assets. The state allows the government to claim ownership of digital assets that have been abandoned for at least three years, a measure designed to establish a digital asset reserve.
Arizona has become the second U.S. state to pass a Bitcoin reserve bill, with Governor Katie Hobbs signing House Bill 2749 in May.
The law allows the state to claim abandoned digital assets after three years and create a Bitcoin and Digital Asset Reserve Fund funded by staking rewards and airdrops, marking a step toward managing digital currencies without using taxpayer funds. Rogers has indicated plans to reintroduce the bill in the next legislative session.
Crypto policies across the U.S.
Other states are taking different approaches to digital assets. Ohio’s House of Representatives passed a bill in June to exempt crypto transactions under $200 from state capital gains taxes, though it has not advanced further.
In New York, Assemblymember Phil Steck proposed a 0.2% excise tax in August on digital asset transactions to fund school substance abuse programs.
At the federal level, in July this year, Wyoming Senator Cynthia Lummis proposed exempting small digital asset transactions and gains under $300. Furthermore, she recently announced she will not seek reelection, citing the physical and mental demands of another six-year term. However, she reiterated that during the remainder of her tenure, she will continue to work on pushing priority bills, which include long-backed crypto reforms.
Meanwhile, Arizona’s proposals come amid a growing nationwide debate on regulating and taxing cryptocurrencies. Lawmakers are seeking to encourage innovation while protecting state revenue, making digital assets a key focus in state-level policy discussions.
