Arizona State Senator Wendy Rogers has recently prefilled legislation to make the state more cryptocurrency-friendly by proposing significant tax exemptions for Bitcoin and other digital assets.
This bill seeks to amend Arizona statutes to fully exempt “virtual currency,” defined as digital representations of value functioning as a medium of exchange, unit of account, or store of value, excluding fiat representations from state taxation, effectively removing it from taxable property classes. This would primarily target property taxes on crypto holdings and potentially broader state-level taxation.
Senate Concurrent Resolution 1003 (SCR 1003)
A proposed constitutional amendment to explicitly exclude virtual currencies from the definition of taxable property under the Arizona Constitution, providing stronger, voter-protected safeguards.
Senate Bill 1045 (SB 1045): Prohibits counties, cities, and towns from imposing any taxes, fees, or fines on individuals or businesses operating blockchain nodes, protecting decentralized network infrastructure.
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These measures build on Arizona’s existing pro-crypto policies, such as exempting airdrops from income tax since 2022 and allowing gas fee deductions. However, SB 1044 and SCR 1003 would require approval by Arizona voters in the November 2026 general election due to their impact on taxation and the constitution.
SB 1045 could advance through the standard legislative process without a public vote.The proposals aim to position Arizona as a leading U.S. jurisdiction for crypto adoption, competing with states like Texas and New Hampshire.
Note that these are state-level changes only—federal taxes on capital gains from crypto sales or income would still apply. The bills are in early stages ahead of the 2026 legislative session.
Senate Bill 1044 (SB 1044), prefiled by Arizona State Senator Wendy Rogers for the upcoming 2026 legislative session, aims to exempt “virtual currency” from state taxation, primarily by removing it from classifications of taxable property.
Exemption from Taxation
The bill amends the Arizona Revised Statutes to explicitly exempt virtual currency from state-level taxation. This targets property taxes on holdings of cryptocurrencies e.g., Bitcoin, Ethereum, and other digital assets, preventing them from being treated as taxable property.
Definition of Virtual Currency: It defines virtual currency as a digital representation of value that functions as a medium of exchange, unit of account, or store of value. This explicitly excludes representations of the U.S. dollar or foreign fiat currencies like stablecoins pegged 1:1 to USD might not qualify if considered fiat representations.
The exemption applies to holdings of virtual currency, meaning individuals and entities would not owe state property taxes on their crypto assets. It does not affect federal taxes (e.g., capital gains on sales) or taxes on income from mining, staking, or transactions.
SB 1044 works in tandem with Senate Concurrent Resolution 1003 (SCR 1003), which proposes a constitutional amendment to exclude virtual currency from the definition of taxable property under the Arizona Constitution for stronger, permanent protection.
Both SB 1044 and SCR 1003 would require approval by Arizona voters in the November 2026 general election due to their impact on taxation and revenue. The bill is in the prefiled stage and has not yet been debated or voted on in committee.
If enacted via voter approval, it would position Arizona as one of the most crypto-friendly states for holders, eliminating state property taxes on digital assets and encouraging adoption and investment.
This builds on prior Arizona policies, like exemptions for airdrops and deductions for gas fees, but represents a broader push to clarify and reduce tax burdens on crypto.
The full bill text is not yet publicly available on the Arizona Legislature website as the 2026 session has not begun, but summaries from legislative tracking sites and news reports consistently describe these core elements. Federal taxes remain unchanged.