The Bill:
AMENDING SECTION 43-505, ARIZONA REVISED STATUTES; RELATING TO INCOME TAX PAYMENTS.
B. A TAXPAYER MAY PAY THEIR INCOME TAX LIABILITY USING A PAYMENT GATEWAY, SUCH AS BITCOIN, LITECOIN OR ANY OTHER CRYPTOCURRENCY RECOGNIZED BY THE DEPARTMENT, USING ELECTRONIC PEER-TO-PEER SYSTEMS. THE DEPARTMENT SHALL CONVERT CRYPTOCURRENCY PAYMENTS TO UNITED STATES DOLLARS AT THE PREVAILING RATE AFTER RECEIPT AND SHALL CREDIT THE TAXPAYER'S ACCOUNT WITH THE CONVERTED DOLLAR AMOUNT ACTUALLY RECEIVED LESS ANY FEES OR COSTS INCURRED BY THE DEPARTMENT FOR CONVERSION.
The Motivation:
Certainly Arizona recognizes the commercial aspect of blockchain and digital currencies and is looking to be in the forefront. Representative Jeff Weninger is quoted “Arizona 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.”
The Impact to the Crypto Space:
The short term affect will be be negligible for bitcoin, however it is another bullish sign for the industry as a whole. It is worth noting that litecoin was singled out among other cryptocurrencies "recognized by the department". Litecoin, which is on the most visited sight Coinbase (along with Bitcoin,Ethereum and Bitcoin Cash), may see a short term lift because of it's price point especially if other states follow suit. The volume of transactions during tax season will certainly be worth noting but the bigger picture is that another government institution is recognizing this burgeoning asset class.